Cameron's economic policies will kill, not cure - look what's happened to Ireland

[ymu]

Yes everyone who has invested money in property would be penalised, which these days is not just a wealthy elite but many people who invested in property as a retirement plan.

Utter bollocks. There is no reason people should make money for living somewhere - and if noone could make money this way, there could be no housing bubble, no negative equity, and much cheaper housing. Maggie made housing into yet another investment vehicle, to suck money from people with little into a sphere where the ever greedy money markets could spin a profit of it, and it has been fucking disastrous. You'd have to have been asleep not to have noticed that. Or you're only about 15 and haven't been paying attention for long enough.

 

[Blagsta]

My posts are not personally abusive.

They are. You just can't see it. You're cheerleading economic policies which are directly affecting my livelihood for the worse, and that of many others. It's personal whether you like it or not.

 

[moon23]

Utter bollocks. There is no reason people should make money for living somewhere - and if noone could make money this way, there could be no housing bubble, no negative equity, and much cheaper housing. Maggie made housing into yet another investment vehicle, to suck money from people with little into a sphere where the ever greedy money markets could spin a profit of it, and it has been fucking disastrous. You'd have to have been asleep not to have noticed that. Or you're only about 15 and haven't been paying attention for long enough.

Yes there has been a housing boom fuelled by irresponsible lending by the banks. If the banks were exposed to the impact of their business risks rather than bailed out by the state then they wouldn’t be so reckless.

 

[littlebabyjesus]

I'm confused now. Do you think the housing boom was a good thing or a bad thing. At the moment you appear to be trying to have it both ways.

 

[Blagsta]

Yes there has been a housing boom fuelled by irresponsible lending by the banks. If the banks were exposed to the impact of their business risks rather than bailed out by the state then they wouldn’t be so reckless.

If the banks had collapsed, do you know what would have happened? We were only about 24 hours away from there being no money in cash points! Imagine what that would have been like...

 

[moon23]

I'm confused now. Do you think the housing boom was a good thing or a bad thing. At the moment you appear to be trying to have it both ways.

I think a housing market is a good thing, but the boom was a bad thing. I think the boom resulted from banks taking risks and not being exposed to the consequences of those risks and interventionist state policies that sought to artificially assist first-time buyers into reaching the lower ladder of the property market rather than waiting for the market to self-adjust to people’s actual spending power.

 

[littlebabyjesus]

So what about those 'investors' who are relying on the boom to stand up to finance their retirements?

 

[moon23]

So what about those 'investors' who are relying on the boom to stand up to finance their retirements?

They wouldn't have invested if it wasn't for the cheap borrowing at the bottom of the ladder creating the market conditions.

 

[littlebabyjesus]

If you have enough for the huge deposits, borrowing is cheaper than ever now. So what do you want? More expensive borrowing that will fuck over those who bought after the boom?

How about a punitive tax on profiteering that will not harm those people at all but will kill any threat of a boom in the future?

 

[moon23]

If the banks had collapsed, do you know what would have happened? We were only about 24 hours away from there being no money in cash points! Imagine what that would have been like...

So you think money is a good thing?

 

[Blagsta]

So you think money is a good thing?

What sort of question is that?

 

[butchersapron]

So you think money is a good thing?

Nutter

 

[moon23]

If you have enough for the huge deposits, borrowing is cheaper than ever now. So what do you want? More expensive borrowing that will fuck over those who bought after the boom?

How about a punitive tax on profiteering that will not harm those people at all but will kill any threat of a boom in the future?

Introducing it on new purchases would solve a few of my concerns about people already committed to investments.

I would argue having a fluid property market allows for more opportunities for private enterprise to make use of redundant space. You need some allowance for property developers that will be eager to convert old empty property stock into an attractive proposal. There would be less of a market incentive for improving old stock to sell on if you had a punitive tax on re-selling.

We are drifting quite far off OP post now as well.

 

[DownwardDog]

Yet Germany has considerably higher labour costs than the UK and has a much much bigger manufacturing sector.

How can that be?

Because their immediate post war reconstruction focussed on industrial policy rather than pissing about trying to give everyone free false teeth and nationalising shit.

 

[littlebabyjesus]

I would argue having a fluid property market allows for more opportunities for private enterprise to make use of redundant space. You need some allowance for property developers that will be eager to convert old empty property stock into an attractive proposal. There would be less of a market incentive for improving old stock to sell on if you had a punitive tax on re-selling.

You can make allowances for improvements – a survey when purchasing is compared to a survey when selling and real substantial home improvements can be tax-deductable.

As for the problem of houses remaining empty, there is a hugely effective way to solve that problem, one that is highly responsive to the real housing needs of the people: squatting.

 

[moon23]

What sort of question is that?

One that examines whether you think we need to preserve the foundations of the current model of capitalism. Namely access to currency.

 

[moon23]

You can make allowances for improvements – a survey when purchasing is compared to a survey when selling and real substantial home improvements can be tax-deductable.

As for the problem of houses remaining empty, there is a hugely effective way to solve that problem, one that is highly responsive to the real housing needs of the people: squatting.

How much will this survey system cost to run and administer?

I think squatting is an acceptable way of using housing stock that is empty so long as it doesn't make it too difficult to sell stock occupied.

 

[littlebabyjesus]

Introducing it on new purchases would solve a few of my concerns about people already committed to investments.

That could not work – it would have to apply to all sales from now on (this would be a tax on the vendor, not the purchaser). We need to get away from the idea that it is right to own limited, essential resources and make a profit out of selling those resources on. This is not 'investment'. It is simply extortion.

I don't see this as a derail – it get to the heart of economic policy – what should and should not be legitimate investments, how pensions should be funded: which has a direct impact on the level and nature of national debt.

 

[ymu]

So, let me get this straight. In moon23-land, if you're not a neo-liberal moron, you must be in favour of an overnight collapse of the economy. Jebus.

 

[littlebabyjesus]

How much will this survey system cost to run and administer?

When you buy a house, you have it valued. When you sell a house, you have it valued. The system is already in place.

Or you could simply have a system whereby you keep the receipts and send them off to the taxman as part of your settlement when you sell.
Edit: in fact that would not work as you may have done the work yourself. You simply have a survey when buying and another survey when selling. In fact, this would be an opportunity to ratlonalise the system as it stands, whereby purchasers commission surveys and often several surveys are done on the same place before it is sold, which is unnecessary and wasteful.

It would entirely replace stamp duty, and would cost little more than stamp duty to administer.

 

[moon23]

So, let me get this straight. In moon23-land, if you're not a neo-liberal moron, you must be in favour of an overnight collapse of the economy. Jebus.

No I haven't attempted to draw that conclusion i'm just asking a question.

 

[ymu]

No I haven't attempted to draw that conclusion i'm just asking a question.

If you hadn't, it's a remarkably odd question to ask.

 

[moon23]

If you hadn't, it's a remarkably odd question to ask.

I just want to understand Blagsta's reasoning. I'm not presuming that it's going to be wrong headed or making any presumptions about it.

 

[moon23]

When you buy a house, you have it valued. When you sell a house, you have it valued. The system is already in place.

Or you could simply have a system whereby you keep the receipts and send them off to the taxman as part of your settlement when you sell.
Edit: in fact that would not work as you may have done the work yourself. You simply have a survey when buying and another survey when selling. In fact, this would be an opportunity to ratlonalise the system as it stands, whereby purchasers commission surveys and often several surveys are done on the same place before it is sold, which is unnecessary and wasteful.

It would entirely replace stamp duty, and would cost little more than stamp duty to administer.

Might work, the coalition has allready increased Capital gains tax for high earners though.

 

[ymu]

I just want to understand Blagsta's reasoning. I'm not presuming that it's going to be wrong headed or making any presumptions about it.

You think he needs a reason to not want the entire economic system to collapse overnight? Why would you need an explanation for that?

 

[littlebabyjesus]

Might work, the coalition has allready increased Capital gains tax for high earners though.

That's peanuts – for such a measure to be effective, it has to be well over 50%.

As for your other objection that it would stop people from doing up empty housing, it could in fact be designed to do the exact opposite.

Eg:

1. I buy a house for £100k, do nothing to it and sell for £200: I pay £75k in tax.

2. I buy a house for £100k, do work on it that costs me £50k, sell for £300k. The survey reveals that without the work I have done on the house, in current market conditions it would be valued at £200k. Therefore, I pay £75k in tax. The work I have done has hence brought me a clear profit of £50k.


The crucial point here would be that people would be taxed for making money out of owning, not out of doing. This promotes real investment – investment that adds value to that which is being invested in. At the moment, the recent craze for investing in something in the hope that an asset bubble will bring you a return has meant that the money put in has been dead – returns have been reaped without any value being put in. This is a crazy way to run affairs.

 

[ymu]

Is there any good reason why CGT should be taxed at a lower rate than earned income?

 

[DownwardDog]

2. I buy a house for £100k, do work on it that costs me £50k, sell for £300k. The survey reveals that without the work I have done on the house, in current market conditions it would be valued at £200k. Therefore, I pay £75k in tax. The work I have done has hence brought me a clear profit of £50k.

That's so subjective you could just slip the surveyor a backhander and get whatever result you wanted.

 

[littlebabyjesus]

That's so subjective you could just slip the surveyor a backhander and get whatever result you wanted.

There's another, slightly cruder but much easier way to do it. You take the price paid at the time of purchase and compare to the recent sales of properties in the area that would have been that price too by examining the land registry. You then charge the tax on that amount regardless of the price you get for the place. Not ideal as it is using the sales of other houses to determine the tax you pay on your house, but it would be roughly right most of the time.

Oh and any surveyor found to have knowingly falsified a survey would go to jail, along with the person they falsified the survey for. Surveying and valuation are indeed subjective, but they are not that subjective. Also, there would be only one survey – it would be paid for by the vendor, but it would also be available to the purchaser. That ought to minimise the chances of fraud.

 

[ymu]

It's a lot simpler than that. You get to keep the deposit you put down, and you can add to this amount with receipts for permanent fixtures bought and work done - signed off by the tradesmen who did the work (with the amounts to be checked against their own tax returns to disincentivise faking). Adjusted for wage inflation over the relevant periods as any stable housing and rental market must keep pace with this or it eventually gets silly. 100% tax on the rest, also to prevent it getting silly.