Why Labour mansion tax is not progressive at all, while being anti-London

One policy that the Labour Party made clear for the 2015 election manifesto during their last conference before the 2015 general election is that a mansion tax will be added for housing in the UK which is worth more than 2 million pounds.

The reason is even more strange. The purpose of this tax is not even to fund the funding to build new cities, or to make existent council housing better, as it is it to supposedly fund the NHS.

It’s a bad policy for many reasons. Considering the high value of housing in London and how even modest properties had taken an exponential amount of value in recent years, the vast majority of people targeted with this tax will be in London. And yet, for a London pensioner who had bought his house decades ago, it’s not extraordinary to think that the housing value had went so up in recent decades that someone could have a house worth 2 million pounds today which was bought at only a fraction of the cost.

This tax also bring another problem. Let’s say you are a senior on a fixed income who own a property bought decades ago in Central London, and this same house is your main source of collateral, how will you pay the tax? Unlike a very rich person, you don’t have in this case a playing room for disposable income, so the only option would be to sell your home even if you were a smart investor while you bought this home and lived in it when it took a lot of value with time.

This is why this policy is not progressive at all. It will rather have the opposite effect, it will create hermetic classes of housing and throw away people who were old residents .

In a place like London, this could well means that the only people who would have enough disposable income to pay this same tax would be very rich people from the UK or aboard who use their London housing as a sort of investment and/or as a sort of pied à terre.

The irony is that policy which is supposedly ‘progressive » is that it will create two classes of housing. And there is little doubt that this tax is a sort of magic formula is order to pay for numerous things. As fairy tales don’t always finish in a good way, this  »mansion » tax could be one of them, a tax with high hopes and expectations to fill miscellaneous expenses, but which turned out to be a disaster especially for those it was supposed to help at the first place. Like the SNP and UKIP, Labour also seems to play London versus rest of the UK by their choice of tax.

Perhaps this is a sign that the  »One Nation » Labour brand is dead and buried once for all? And it seems like it.

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