Why all politicians must now reject the mansion tax idea
With Labour having failed to pull the Liberal Democrats into their mansion tax trap, it’s time for all politicians to drop the notion because such a policy would result in capital flight that the country can ill-afford.
Now MPs have had the debate on the issue, it really is time that politicians of all persuasions stopped political point-scoring and abandoned the idea of a mansion tax because, as the Laffer Curve demonstrates, there comes a point when taxing the wealthy becomes counterproductive for raising revenue.
Should a mansion tax come into effect it would, inevitably, result in capital flight – right at a time when the UK needs all the revenue it can get – because the wealthiest in society are the ones who have the resources simply to move to a lower tax jurisdiction to protect their wealth.
Since the notion of mansion tax started topping news agendas in recent times, our advisers have reported an increase in the number of international investors and high-net-worth individuals who are enquiring about relocating themselves and their assets outside of Britain to safeguard their funds.
I suspect that a mansion tax would be the final straw for many of Britain’s wealthy – who contributed almost 26 per cent of the UK’s total income tax in the last financial year – because they would rightly feel aggrieved that they would need to pay another tax on a property that was bought with money that has already been taxed, either through inheritance or income tax, plus they will have paid stamp duty on the transaction and will be paying council tax.
Nigel Green devere Group
Blog written 13th March