Will Osborne accept the Lib Dem offer?

TomTom

the government must always be seen to be hitting the lower middle-class in some way.

Widmerpool

For purely practical reasons I hope George does not give in to Cable on the Mansion Tax.
It will only encourage Cable!
He was [it seems] partly behind the departure of Steve Hilton who was very disappointed with Cable’s performance at Trade -not fighting red tape and preferring to tax millionaires [with a Mansion Tax] rather than making millionaires as a Trade Minister like Lord Young tried to do by supporting the SME’s

Cable with his censorious class ridden thinking is holding back our economic recovery and should be reshuffled into oblivion and not given encouragement with his crack pot ideas like Mansion Tax and appointing Professor “Les”

LibertarianLou

It's a good idea although I thought it was Tim Montgomerie's, not the Lib Dems?

tom jones

He needs to be bold this budget because the economy needs it and so do we as party supporters. I believe he should cut the 50P to 39P (not a typo, I think going that little bit further would be a big move and it'd be a confidence boost to business), up the tax threshold to £10K - something we and Lib Dems can be hugely proud of, massive crackdown on tax evasion/avoidance and tax wealth/property over income. This package of tax changes would be fair, revenue boosting and popular and that's what we need.

Mark Cannon

The so-called "mansion tax" is a very dangerous idea. If once introduced it will grow, with ever lower thresholds and ever higher rates.

It will also, of course, hit property prices.

In short, a thoroughly bad idea and political suicide for Mr Osborne.

Bonzodog

Wonder if the LDs will accept Boris's idea of a plugging of the loophole where property may be bought and sold as a company thus avoiding stamp duty? This idea might be floated as an alternative to Mansion tax.

Rhoda Klapp

To give them quid pro quo on every issue is to give the pygmies equal rank with the party which makes up almost half of the commons. Every time it is a nail in the tory coffin. The people ought to have some rights in regard to taxation, among which is the right to be able to make financial plannig choices which will not be overturned completely every time the treasury sees a pile of money somewhere. The mansion tax and all other proposed property taxes are bad. They have unintended consequences, always. They should not be brought in as the result of some tacky backroom deal to keep the coalition going. Cable should be secured to an anchor, and thrown overboard.

James de la Mare

One marvels at the absurdity of Liberal thinking over a so-called "mansion tax". Two million pounds will buy an ordinary Victorian house in many parts of London, or maybe a nice flat. Mansions don't come into it.

If people are expected to pay any tax to the government, then first they have to have the means - the surplus of income over expenditure - to do it without a reduction to stringency or poverty, or without the sale of assets. That doesn't seem to come into much political thinking. Perhaps the key is the priority given here to what is supposedly "least harmful to the economy", rather than priority given to the circumstances of those within the economy. There is a difference.

The serious point in this is that our society has been so destabilised and so impoverished since 1945 by successive taxes that anybody would expect politicians to have learnt by now that taxes must be vastly reduced, perhaps by 80% as Steve Hilton is said to have advocated, and not increased. General taxation of ten percent had been considered reasonable for centuries, and only in recent times have we been forced into 50% tax or more.

Politicians have stoked up "financial services" and "money" or "asset management" as a dreadful substitute for manufacture and practical services largely because business ownership has been hit so hard by taxation since 1945, and much business is now owned by foreigners or banks, instead of by families or individuals. Business now borrows to keep going or expand, instead of relying on its shareholders for funds. Taxation of homes is utterly irrelevant to dealing with those serious problems.

Tax has to be levied on income, not on property or wealth. It is income which allows the accumulation of very great wealth. It is, moreover, the most natural human aspiration to provide well for one's family and descendants - and tax should certainly not prevent that.

The answer to this problem is not what the envious Liberals want to impose, but to calculate income tax not year by year, but on an accumulating running total of income over a lifetime. Then let the wealth accumulate without being robbed by government, so that once again it is our own people who have a secure stake in the country and its economy.

whatawaste

How did the Lib Dems arrive at the £2m figure? How many Lib Dem MPs own properties valued in the £1m to £2m band? Just a thought...

Chris lancashire

It is utterly depressing to live in a country where the politics of envy prevail - "the government must always be seen to be hitting the well off".

Is there nobody who can make the case for wealth and hence job creation, low taxation universally and conditions to encourage entrepreneurs?

Wily Trout

If only the policical class could lose their addiction to presentation over substance. If they are sure that lowering the 50p tax rate to 40p will bring in more tax, they should publish the evidence and do it, regardless of perceptions, because it would be for the public good. As would the £10k threshold. Taxing mansions is not for the public good. It does not benefit the country at large; it is purely presentational.

James Strong

Is there nobody in mainstream politics who will make the case for taxing as little as possible?
Not as a matter of political expediency but as a matter of principle.

strapworld

Well written Mr De La Mare and Chris Lancashire.

We must all remember that the liberal democrats are socialists and thus their taxation policies fit that mindset.

That Cameron and Co allow the rump of this government to control says more about Cameron than anything else. WEAK.

Man of the people? do not make me laugh.

TomTom

Local Elections in a few weeks time, but I never see a Candidate pledged to shrink the Council or even abolish it. All I get it platitudes and it is a failing Metro Council enslaving 500,000 People.......but it appears no party wants to break it up or return to the Pre-1972 situation. We have one Metro bounded by another - it is like being trapped on a Collective Farm

Mike Brighton

So depressing, instead of a mansion tax why not just cut public spending in a meaningful and material manner to enable taxes to be reduced and encourage growth..
The sad truth is whacking the "rich" is a lot politically easier that cutting spending; especially with a scaredy-cat continuity-Labour PM and Chancellor.

Beware the Mansion tax...£2 million today, £1 million tomorrow, £500K in a few years under a new Labour Chancellor and a wizard way to raise revenue from er tory voters so who cares what they think.
How long before the new Chancellor Ed Balls puts the tax at a threshold of £250K saying that the vast majority will not be impacted as the average house price is around £220K....

Remittance Man

On really has to wonder what the motivation for taxing the rich really is.

Of course the lefties would have one believe it's "fairness", but I find that hard to believe.

For starters even under a flat tax regime, a rich man pays much more tax than a poor man. Yet he costs the government far less. There's a very good chance that he will pay for his children's education, there's a very good chance he will have some medical insurance. Almost certainly he won't require welfare handouts and his pension will be privately funded. So how can it be "fair" for him to be charged more tax?

I can only conclude that the real motivation is a poisonous combination of spite and envy.

Tim R

So Osborne has to choose between taxes on income or taxes on wealth.
May I suggest a third way?
Perhaps if the government stopped spending so much (as in actually spending less rather than saying they are) then maybe we could just have tax cuts not funded by other tax rises.
Just wonderin'...

Old Holborn

Surely "Tax doesn't have to be taxing" #fail

Peter From Maidstone

Nick Clegg's house is reportedly worth £1.5 million. Is this why the hypocrite is pitching for a £2 million limit on his mansion tax?

Pete

Why not a 100% tax on all property belonging to politicians?

General Zod

How can this possibly be a good idea? £2m sounds like a lot of money to the vast majority of the population, but it is the price of a middle class house in a nice area of London. At the £2m level, most people will have very large mortgages (unlike the £5m+ bracket which is mostly affluent foreigners). Why should middle class people (albeit middle class people with six figure incomes) have to pay tax on the value of their heavily mortgaged homes?

Paul

£2m a price for a "normal middle class family" home in London? Well if even half of the value was equity that leaves a £1m mortgage, to get which you'd need a family income of at least £300-400k.

The median average income in the country is £26k. Even your average middle class family is not on anything remotely like £400k salary.

Oppose it if you want, for whatever reasons you want, but please don't claim it's going to hit "normal middle class families". It would affect only 30-40,000 properties about 1-2% of the housing stock.

As the OECD correctly realise its much better to tax property than income -it doesn't move, there are few tax dodges and it doesn't discourage hard work as income taxes do.

Plus the tax woul be 1% of the value OVER this level so the property would have to be worth a lot more than £2m to cost a lot.

Baron

A government big enough to give you everything you want, is strong enough to take everything you have, so said Thomas Jefferson, and how right the man was, taxes and government spending are but of the same coin, it’s the Welfare state breeding the ever mushrooming entitlement culture with its insatiable hunger for funds that’s the problema, the financing of it is merely a consequence, the deluded Scot raided the pension pot, fugged up the retirement of millions, young George will strangle the other asset class that till now was the refuge of the truly prudent, ruining the retirement of the rest of us.

We can have either a culture where the range of entitlements knows no boundaries, or one where money’s invested as capital creating wealth, trust Baron, he knows, he has looked it up.

TrevorsDen

Its all very well saying spend less and do it instantly. It does not work, its not as easy as that. Look at the riots in Greece. Political suicide. Social disaster as well.

As far as a tax on property - the fact that there might not be a future 'mansion tax' in place would not stop a future chancellor Balls from levying one.

I do not own a house worth 2 million and never will. If I could then I might consider moving if I felt the tax unfair (bearing in mind my income tax was being reduced). The desperate concern for people living in such properties is touching.

If alternative taxes could be found to not only abolish 50p but reduce other income taxes then in this time of austerity I would welcome it. I doubt they can, but if they could it would trump the LDs and be popular.

General Zod

So, your argument, Paul is that confiscatory taxes should be imposed upon these London families.

Rhoda Klapp

Paul, plainly there will be no houses priced at £2M plus a bit. They will be worth far less than those priced at £2M minus a bit. So a lot of houses will fall out of the 30-40,000. So how much money will be raised? Oh, and people like my pensioner friend who has a £2M house bought for rather less in the 40's, which will soon enough raise 40% of its value for the revenue, how will she be treated? Given a pass, or thrown out of her home of 60 years? This is not a tax which could be expected to raise much money. It will distort house prices, it will mess up long-term financial planning, and it will target some unintended victims. Does the OECD say you should suddenly change your tax basis in order to turn the economy on its head? Property MAY be a better basis. That is debatable. To swap to property taxes as the result of a squalid deal is not the way to do it.

oldtimer

According to Alistair Heath over at CityAM, the UK already has the highest rates of property tax in the OECD raising 4.2% of GDP vs an OECD average of 1.8%.

Do the politicians who spray these tax notions about ever bother to check their facts first? It doesn`t look like it.

James de la Mare

Paul (3.54pm) - The OECD does not "correctly realise it's much better to tax property than income". Doing so may make it easier for the government to get at some money, but that isn't being "correct". In fact for many reasons, a number of which have been mentioned here by other commenters, there is scope for greed, unfairness and irrelevance.

If, to take a commonplace example, I had bought a house years ago for a sum that would seem small today, had paid off a mortgage or whatever from a modest income, I still lived in it and was suddenly called upon by the Liberals to pay a property tax out of a small pension (on top of council tax which is due, however small a householder's income is, and property maintenance costs and everything else) then the only way to meet the bill is to sell the home.

Nothing could be more vile, vicious and absurd - yet that is what you are so ill-advisedly supporting! If, like a social security parasite, the clobbering of private house owners to keep up escalating benefits payments is your political philosophy, then you should understand that course is the ruin of any community and any nation. But regrettably the ruin of the nation seldom seems to figure in the thinking of many politicians, as long as they can enjoy the perks and status of office.

If the Liberals intend that a property tax will reduce house prices, then they ought to remember that house prices, like other prices, are not set by scarcity or by the cost of making the object, but by the amount of money that is available for their purchase. That availability becomes increased as a debt.

Baron

TrevorsDen @ 4.52, if we don’t do it whatever the pain, the markets will do it for us, the advantage of the former is one can control it, left to the markets, we won’t face rioting, it will be civil war.

Rhoda @ 5.10, hear, hear, and again hear.

Dimoto

People on here (and especially Osborne) should read Jeremy Warner in the DT "Budget 2012 Osborne must resist calls to go Radical".

I don't understand how a "right wing blog", supposedly red in tooth and claw, can come up with so much wet, lame discussion of how Osborne should squeeze the rich, and spend money he doesn't have on (e.g.) lowering diesel prices by a few coppers.

For God's sake get some backbone, learn some perseverance, and stick with the programme all you "right-wing" blimps - and STOP WHINING !!