Debate Needed on Property or Site Value Tax

by T Wed Sep 26, 2012 23:23

Apologies, I have since watched that segment of the programme and they do indeed mention a Site Value Tax, but most of the discussion was about the current Property Tax that the government is planning to introduce and I do agree it is completely unfair. Later in the segment, that economist chap Fred Harrison who was interviewed the other day on radio 1 about Site Value Tax and gave the talk on it in Trinity, actually says the type of Property Tax they are introducing is just going to continue the property boom-bust cycles and he refers to it as a failed property tax which they have in the UK. In his radio interview he clearly identifies such a tax as plain wrong.

I think his idea of a Site Value Tax would have had merit before the bubble started, but now that we are on the other side of it, it would probably unfairly affect people in 'high value' locations who are in negative equity. Nevertheless and I stress again people should give it some thought but keep in mind that the idea (as per interview with Fred Harrison) that Income Tax should be reduced at the same time so that it is tax neutral. That Harrison guy is very clear about targeting developers holding land banks etc.

Anyhow, just for the record, I think we should NOT pay off the banking debt, even though most of the original bond-holders have in fact been paid over with the money we borrowed from the ECB/IMF. On the FrontLine programme, RBB is I think right when he says this money is not going to be used for council services (since they are and will continue to be cut) and will simply be used to close the deficit.

So really all these extra taxes are a mute point. Until the debt is cancelled, there should be complete resistance to all these re-arranging of the deck chairs. One way or another the country will default.

by fred Wed Sep 26, 2012 22:57

The flat household charge tax of 100 euro is just a small charge in comparison to what they are proposing for a property tax. I think it's something like 0.5% of house value which for a very average dwelling valued at 250,000 is 1,250 per year.

they were discussing this upcoming property tax and how they propose to deal with those who can't pay. They would NOT give exemptions for people on low income or negative equity, but only "deferrals". These would build up until the house was sold / passed on to the next of kin.

After a death, the outstanding debts would most likely force a sale. Over time this would mean poorer people who live in the family home with parent or parents would be faced with sale of the roof over their heads to pay government property taxes

watch the programme. It's clear that this property tax "deferral" is how they are thinking.

The general approach is related to the notion in business of "leveraged buyout" I think.
You leverage the person with unpayable debt forcing a sale / transfer of their assets, often at firesale prices.

Quite aside from the government taking their cut from those who can't pay, what annoys me about the negative equity situations is that essentially, banksters create money out of thin air, loan it to someone who buys a real asset. The person then can't pay because the loan was unsustainable in the first place.

The bankster squeezes as much real money earned from work as possible from the person, then takes the real asset into their balance sheet.

It's like money laundering isn't it?

If the banksters just created money out of nothing then used it to directly buy hard assets such as property and houses, we'd all get our knickers in a twist and object.

But if they do it through a third party (us!), we don't get quite so suspicious of the scam.

The banks are essentially getting our hard assets such as land and property by proxy through us using money they made up out of thin air.

Then we "bail them out" adding insult to injury and in doing so, cripple our real economy.

by T Wed Sep 26, 2012 22:06

I didn't see the Frontline programme but are you sure they weren't discussing the Household Tax on it. The above article is about a Site Value Tax and how that differs from a property tax. I would be surprised that the Frontline programme was discussing this. From what you are saying that they talked about "deferring" the charges, this can only mean existing charges -i.e. the Household Tax.

As mentioned in the main article above, the people who launched the book on the Site Value Tax say that have rejected the idea of it. (See the underlined text in main article).

They also make it clear that introducing a Site Value Tax should have a simultaneous reduction in Income Tax -i.e that the overall amount of tax to the revenue is neutral or the same. However we all know that the present government or any future likely government is unlikely to do that and they would just raise all taxes. The Site Value Tax is effectively a wealth tax.

The Household charge is clearly just a flat tax and disproportionately affects the lower paid. It is unjust and I am against it.

I think the Left in general and the Anti-Household Tax campaign won't want to discuss a Site Value Tax it because even though they talk about a wealth tax and the Site Value tax can be just that if done correctly AND at the same time Income Tax is lowered; the compliant mainstream media and the government would completely twist and distort whatever they say on this and put words in their mouth to the effect of saying that they agree with a property tax which would of course be taken out of context. I might also add that I think the mainstream media are generally compliant to the demands of whatever the EU/ECB-IMF want while the government at this stage (and any future government) is simply acting as local technocrats for the financial elite who dictate policy to the ECB and IMF. Lets us not forget this is the same media that sold us all the various wars of aggression and still pimps the War of Terror, the same media that completely hyped the so-called Celtic Tiger and the Irish Property and scared the crap out of many people in their 20s and 30s that if they don't get on the property ladder then they never will and a huge number of these people fell for this propaganda and now face crushing debts for the rest of their lives. One could go on further but I won't.

Thus I think there is not a hope in hell that we will ever see any fair resolution or any useful or equitable measure taken whether it be via a Site Value Tax or any other. Nevertheless I think it is useful for people to read what it is about so they get some understanding of the dynamics of various tax structures and how they can generate or subdue various financial forces and (good + bad) incentives within the economy and society.

by fred Wed Sep 26, 2012 03:15

on the frontline last monday 24th sept. they discussed deferring the paymentys for those who couldn't pay.

From what was said, It's clear that they are going down the route of quietly building up huge charges over time for those who can't pay which will result in families losing the family home after a parent dies

by T Tue Sep 25, 2012 10:26

fred,
Can you clarify your argument. Were you at this meeting of the Fair Tax crowd last night in Trinity and can you indicate what you mean by: They are talking now about "deferring" the tax payment. Who said this?

by fred Tue Sep 25, 2012 03:12

They are talking now about "deferring" the tax payment

This is essentially taking away the houses of the poor by stealth.

They build up unpayable taxes on family homes then when the house is passed on, the tax has to be paid , or presumably the house has to be sold to pay.

Many Poor families will become homeless within a generation as the family home is taken from them to pay this vile tax on the family home.

It's the old "boil the frog slowly" method of stealing from the poor.

This is a tax on a tax on a tax

We pay tax on our wages. Then we buy a house and pay tax. Then the house is taxed.

Enough!!

No tax on basic family homes below a certain reasonable threshold. People have to live somewhere. It's a basic human right.

Until politicians and non frontline upper administrative civil servants bloated wages are cut below 50k, the poor should not be paying any property tax! I'll consider "taking the pain" when they do too!! Until then they can fuck off.