More affordable housing? Not on our tax policies!

Jock — Sat, 14 Jul 2007 01:29:09 +0000

Tucked away in the comments to Lib Dem Voice's How rich are you? article comes this snippet from Tim Leunig (LSE economist, and member of the Housing Policy working party I was on a couple of years back):

"The obvious new incentive effect is on house prices. We would expect them to increase (by around 8x the level of council tax, so around £15k), as happened when rates were replaced by the poll tax."

Well quite. We in ALTER have been saying this since the Local Income Tax policy was first debated. We've gotten the impression that the rest of the party has not been listening. Hopefully someone as respected as Tim within the party will make someone listen with comments like that.

To reiterate...not only will most of your national income tax reduction be eaten up with your new Local Income Tax but if you happen to be in that growing group who are getting no help with housing costs and cannot afford to buy a home, you'll be likely to find prices even further out of your pocket by at least another half an income multiple.

Perhaps this is why the Lib Dem Youth and Students annual conference this year voted against Local Income Tax and in favour of Land Value Tax instead. That cohort is what we usually regard as our "core vote" I believe. Not the people you'd want to piss off I'd have thought.

"Axe the Tax" was, and remains, a great idea - Council Tax is as regressive and unfair as taxes come. Local Income Tax was an easier thing to sell, perhaps, than another type of property tax. But, as Keynes was it said "when the facts change, I change my mind, what do you do sir?" it is time, three years on with property prices up another third, to think again about a tax policy that will extend the misery of those we want to help. There's no shame in changing policies if a better idea presents itself. Affordable housing is, as Gordon Brown said this week, right at the top of the agenda now - we should not continue with a tax policy, in the form of Local Income Tax, GUARANTEED to exacerbate the affordability crisis all parties appear to want to solve.

Technorati Tags: axe the tax, council tax, land value tax, ldys, lib dems, local income tax

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More affordable housing? Not on our tax policies!