Yesterday, I suddenly realised why I don’t like the Mansion Tax. What was the reason for this revelation? It wasn’t Myleene Klaas’s glass of water, or a sudden conversion to David Cameron’s way of thinking. Nor am I thinking of making a bid for Mayor of London, and am worried that the burghers of Blackheath will oppose me.
No, the person who made me see the flaw in the mansion tax was Ed Miliband, and he did so because I agreed with him.
You see, Ed did something clever at Prime Minister’s Questions. He contrasted the Government’s support for the Bedroom Tax with their opposition to a Mansion Tax, asking David Cameron to “tell us why he is so in favour of the bedroom tax but so against the mansion tax“.
It is a neat rhetorical move, sharply contrasting the governments willingness to extract money from people in social housing with their opposition to even a modest charge on houses worth over £2 million.
Defending himself, Cameron did not talk about the Bedroom Tax. Instead he backed the Spare Room subsidy.
At this point I had my flash of self knowledge.
I have no problem with progressive property taxes. You’d have to be a supporter of the poll tax over Council Tax to be concerned by the principle of such taxation.
I have no problem with increasing the share of property tax paid by those in the most expensive houses. The top rate of council tax currently has 135,000 homes in England based on a valuation of £320,000 a quarter century ago. The government estimates that there are currently 55,000 houses now valued at above 2 million, so effectively the Mansion Tax would be a ‘Band I’ of Council Tax aimed at the top third or so of current Band H properties, albeit one collected and spent nationally.
I even like our proposed method of allowing deferred payment of such a tax, through a charge on a property as it’s a neat solution to the ‘little old lady’ problem of property taxation. Maybe we could even extend it to an offer made to pensioners struggling to pay council tax, as we do already for social care.
So what don’t I like about the Mansion tax?
I don’t like the name.
Contained within the concept of a mansion tax is the idea that ‘Mansions’ are deserving of special tax treatment.
This is problematic, first because in setting up the image of a ‘mansion’ as what you seek to tax, you are immediately vulnerable to the charge that what you are taxing is not, in fact, a mansion. You will inevitably be taxing some people who are not bloated plutocrats, and their complaints will appear to have more validity if you don’t appear to mean them. I’m sure Ed Miliband doesn’t think of himself as living in a ‘Mansion’, and neither will many who will be asked to pay. This is what Myleene Klaas was arguing, of course.
Worse, the conceptual idea of a Mansion Tax contains, like its rhetorical fellows the bedroom Tax and the Spare Room subsidy, a whiff of moral judgement. To talk of taxing mansions specifically is to hint that the desire to live in and own a mansion is somehow a negative. It’s the same rhetorical logic that lies behind luxury taxes and sumptuary laws. Talk about a tax in such a way, and you are, somehow, making a moral judgement of those you seek to extract money from. Getting the money should be more than enough. The judgement gains you little.
Plus, I’m not sure that this is a moral judgement all of us share. I would quite like to live in a mansion, and even though I never expect to own a pleasant villa in Tuscany, even a hint that such a longing is unworthy and despicable causes a prickle of irritation entirely unrelated to the value of prospective tax streams, especially when those proposing it already live in nicer houses than I do.
You may as well call the higher rate of income tax the ‘I’m alright jack tax’.
Polly Toynbee makes a good point in the Guardian today, defending such a property tax. She reminds us that one of the purposes of Taxation is to generate the maximum amount of goosefeather with the minimum of squawk.
So here’s my suggestion.
Keep the tax but ditch the name. Instead of a Mansion Tax, propose to introduce a Band N of council Tax, (the N standing for National, and also for NHS).
It’ll be oh so boring, and entirely unjudgemental of people who live in, or would like to live in Mansions, and a unflashy and grey as taxation is likely to be.
What’s more, it’ll sound not like a tax we’re eager to extract from all who aspire to nice houses, but a rather dull administrative adjustment to a current tax policy.
Maximum Feather. Minimum Squawk.
Of course, I’m far too late with this. The rhetoric is set. Which is why I’m not paid the big bucks, and most decidedly do not live in a mansion.