Mansion tax would be both arbitrary and unfair
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Commenting on speculation that the Labour Party will introduce a mansion tax to fund increased NHS spending, Mark Littlewood, Director General of the Institute of Economic Affairs, said:
“Introducing a mansion tax would be poorly targeted, arbitrary and deeply unfair. The UK already faces some of the highest property taxes in the western world when stamp duty, inheritance and council tax are taken into consideration. Such a levy would act as a double tax, whereby people pay income tax and then are taxed again on a house bought with that income.
“Aside from this, it would disproportionately penalise those who bought houses many decades ago in areas where property prices have rapidly shot up. A person’s assets does not always equate to their income. It would also be an arbitrary tax. People could own several homes costing just under £2mn and not face the levy.
“This is an extremely unwelcome addition to the Labour Party’s already disastrous attempts to tax the wealthy. Evidence has proven that their favoured 50p top rate of income tax raises trivial amounts of money. Those earning over £150,000 pay nearly 30% of all income tax. Politicians should be cultivating this tax base, not eroding it.”
“Despite ever higher funding, the UK still lags behind most comparable countries in terms of health outcomes. Pouring extra money into the NHS, at the expense of those who already contribute a great deal in tax, is not the solution to the failings of our health system.”
Notes to Editors:
To arrange an interview with an IEA spokesperson please contact Stephanie Lis, Head of Communications: 0207 799 8909 or 07766 221 268.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.
The IEA is a registered educational charity and independent of all political parties.
“Introducing a mansion tax would be poorly targeted, arbitrary and deeply unfair. The UK already faces some of the highest property taxes in the western world when stamp duty, inheritance and council tax are taken into consideration. Such a levy would act as a double tax, whereby people pay income tax and then are taxed again on a house bought with that income.
“Aside from this, it would disproportionately penalise those who bought houses many decades ago in areas where property prices have rapidly shot up. A person’s assets does not always equate to their income. It would also be an arbitrary tax. People could own several homes costing just under £2mn and not face the levy.
“This is an extremely unwelcome addition to the Labour Party’s already disastrous attempts to tax the wealthy. Evidence has proven that their favoured 50p top rate of income tax raises trivial amounts of money. Those earning over £150,000 pay nearly 30% of all income tax. Politicians should be cultivating this tax base, not eroding it.”
“Despite ever higher funding, the UK still lags behind most comparable countries in terms of health outcomes. Pouring extra money into the NHS, at the expense of those who already contribute a great deal in tax, is not the solution to the failings of our health system.”
Notes to Editors:
To arrange an interview with an IEA spokesperson please contact Stephanie Lis, Head of Communications: 0207 799 8909 or 07766 221 268.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.
The IEA is a registered educational charity and independent of all political parties.
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