Stamp Duty

[inbetween]

A panic which the rest of the world appears to have escaped? Any other Govt in the world ignore their regular PPE set up a VIP lane and get their country shafted? Did any other spend £37bn on a track and trace system run by the wife of a mate and that did fuck all and was quietly dropped?

Of course there was panic. Difference is here the first thought was not "how do we sort this quickly and cost effectively" but was " how do we - our mates - our donors and our contacts moneytise this? "

There are a lot of myths on this, if you would only look closer. Bunging that £37bn figure as though it's one item misses the big picture. The majority of the money spent on track and trace was spent on COVID testing and the rest on manual contact tracing, plus that stupid tracing app that nobody used.

The UK was third in the world for total tests performed I think. The only thing we could of done is tested less or not at all but that certainly wouldn't of been a good idea. In hindsight the testing was useful in shaping lockdown policy but the contact tracing part was a disaster... The latter cost a lot and there isn't too much else to say.

I have no doubt that there was cronyism of course but I seriously doubt that this is directly responsible for the £400bn cost of COVID. I mean bloody hell, the taxpayer was paying a huge number of people 80%/60% of their wages to do nothing for over a year. Of course it was eventually going to cost us all an absolute fortune.

 

[better dead than red]

 

[Chippy_boy]

“Did you realise that the stamp duty rate on property value above £925k is 10%??? And 12% on properties over £1.5m. 10% or 12% of their ALREADY TAXED income?”
Nope, didn’t realise that. I’ll shed a tear for the affected.

You see that's the difference between me and you. I am not remotely resentful of people fortunate enough to be better off than me. I'm just interested in what's right and what's fair, and I don't think taking many tens of thousands of pounds off someone, just because they want or need to move house, is at all fair.

Perhaps Labour should change its name to "The Bitter Party" as a more apt description? Of course not all Labour supporters are bitter, but it seems a lot on here are.

 

[johnnytapia]

You see that's the difference between me and you. I am not remotely resentful of people fortunate enough to be better off than me. I'm just interested in what's right and what's fair, and I don't think taking many tens of thousands of pounds off someone, just because they want or need to move house, is at all fair.

Perhaps Labour should change its name to "The Bitter Party" as a more apt description? Of course not all Labour supporters are bitter, but it seems a lot on here are.

I understand what you’re saying and appreciate the considered response. Think I was trying to get across how imbalanced the “system “ is.

I’m not bitter at people who are better off than me -I’m bitter at the people who perpetuate a system that is so inherently unfair- how can it be right that wealth alone allows you access to a dentist / doctor when you need it?

That you’re likely to be able to read the books you want because you can afford to buy them as opposed to someone relying on their (now defunct) library?

We have become a nation driven and riven by greed. IMHO

 

[Chippy_boy]

I understand what you’re saying and appreciate the considered response. Think I was trying to get across how imbalanced the “system “ is.

I’m not bitter at people who are better off than me -I’m bitter at the people who perpetuate a system that is so inherently unfair- how can it be right that wealth alone allows you access to a dentist / doctor when you need it?

That you’re likely to be able to read the books you want because you can afford to buy them as opposed to someone relying on their (now defunct) library?

We have become a nation driven and riven by greed. IMHO

I also appreciate your considered response :-)

And actually, I agree with every word you say.

 

[Vic]

You see that's the difference between me and you. I am not remotely resentful of people fortunate enough to be better off than me. I'm just interested in what's right and what's fair, and I don't think taking many tens of thousands of pounds off someone, just because they want or need to move house, is at all fair.

Perhaps Labour should change its name to "The Bitter Party" as a more apt description? Of course not all Labour supporters are bitter, but it seems a lot on here are.

Wow. You start a bitter thread about stamp duty of 10-12%, but, like Sunak, it's as if the Tories haven't been in power for 13 years. A reminder - stamp duty was:

Maximum 4% when Labour left office...

 

[Chippy_boy]

Wow. You start a bitter thread about stamp duty of 10-12%, but, like Sunak, it's as if the Tories haven't been in power for 13 years. A reminder - stamp duty was:

The events of the 20th century are just things that happened in another universe as far as you'er concerned, aren't they.

And anyway, since when was this a thread about Labour or the Tories? You're fucking obsessed with it.

 

[Vic]

The events of the 20th century are just things that happened in another universe as far as you'er concerned, aren't they.

And anyway, since when was this a thread about Labour or the Tories? You're fucking obsessed with it.

From the guy whose previous post said

Perhaps Labour should change its name to "The Bitter Party" as a more apt description? Of course not all Labour supporters are bitter, but it seems a lot on here are.

No idea what the 20th century has to do with the rate of stamp duty in 2010.

 

[Chippy_boy]

No idea what the 20th century has to do with the rate of stamp duty in 2010.

Yes you have, it's just it doesn't fit your narrative, so you choose to ignore it.

To spell it out - not that it needs spelling out since you know this as per above - World macro economic events have a HUGE impact upon a country's economy. We entered 2010 on the back of a global banking crisis that had left the UK with a then unsustainable debt burden, one that was rapidly rising due to the also huge budget deficit. After years of trimming of government spending, and the economy finally starting to recover, we've then had Brexit, COVID, the war in Ukraine, massive hikes in energy prices and huge inflation rates and interest rates, which have massively increased our national debt and the costs of servicing it. At the same time, NHS spending in particular had gone through the roof.

This imbalance between government expenditure and income OF COUSE has implications for the amount of tax it must raise to try to balance the books.

Only an uninformed buffoon could not understand this. And I assume you are not one.

 

[ChicagoBlue]

I understand what you’re saying and appreciate the considered response. Think I was trying to get across how imbalanced the “system “ is.

I’m not bitter at people who are better off than me -I’m bitter at the people who perpetuate a system that is so inherently unfair- how can it be right that wealth alone allows you access to a dentist / doctor when you need it?

That you’re likely to be able to read the books you want because you can afford to buy them as opposed to someone relying on their (now defunct) library?

We have become a nation driven and riven by greed. IMHO

From a distance, I’d say you have become a nation driven by resentment and spite, full of people looking for a handout, not a hand up!

I agree that the NHS is a crown jewel and should be protected, as medicine in America is a profit-driven commodity full of middlemen taking a massive cut, but beyond that I see a nation with too many people who want SOMEONE ELSE to pay for their free ride!

Government collects money via taxation. In England, it appears to have become such a “rich person’s problem” because so many want so much for giving so little, yet someone has to pay. Hence, greater and greater “progressive” taxation.

As they say in government circles, if you need revenue, you’ve got to get it from where the money is! Home price inflation is a gift to the Inland Revenue, which is why they reinvented Stamp Duty recently!

 

[roubaixtuesday]

What a nasty, pernicious and stupidly counter-productive tax that is.

It's been 21 years since I moved house and I am not planning on moving any time soon, so I have no horse in this race. But recently I had cause to take a look at it. The rates people with larger properties are being charged should they wish to move, are just obscene.

Did you realise that the stamp duty rate on property value above £925k is 10%??? And 12% on properties over £1.5m. 10% or 12% of their ALREADY TAXED income?

I don't own a house worth anything like these amounts and could not move into one either, so I could say it's no skin off my nose. But these are STUPID amounts of money IMO. Someone wanting to buy an e.g. £1.25m house has to cough up £66,250 in stamp duty alone??? This is bonkers. A high earner perhaps had to earn nearly double that, pre-tax, so maybe £120,000 of your gross earnings, taken off you, just to move house? Insane.

You might argue that people buying that sort of property have money to burn, but that is far from the case. Putting aside the fact that hardly anyone has "spare" money to burn, many people are simply moving from one house to a slightly different one. Maybe a bit bigger, maybe a bit smaller, perhaps in a different area. Yet they are effectively FINED for doing so.

What a stupid policy that is. I've not moved house many times, but every time I have, it's meant endless trips to B&Q buying god knows what; new carpets; curtains; plants and gardening gear; paint; maybe some furniture. Perhaps you get the kitchen or bathroom re-done and god knows what else. Tens of thousands spent, generating income for local suppliers, who also pay their taxes. In short, moving house is a GOOD THING for the economy. And of course a flexible and MOBILE labour market is good for the economy generally. But instead we fine people for the temerity of actually wanting to move house?

I wonder how many elderly people are sitting on larger properties and would be quite happy to downsize, but don't have a spare £30k (or whatever) in cash that they want to bung the taxman? How many people are put off taking a better job and moving house because of the offensive stamp duty charges?

If I was in charge and making changes, stamp duty would be perhaps the very first tax I'd be taking a look at. I think it's a dreadful tax.

EDIT: It's also a tax I find it hard to think of any moral justification for. If someone owns a house worth (say) £650,000 and they want to move to another house also worth £650,000, why on earth should the taxman be receiving any more at all from such a transaction? What possible justification for such robbery is there?

In a small way, it's a tax on unearned wealth. If it were removed, house prices would simply go up to compensate, so nobody would gain.

Your points on impact on mobility are valid, though.

Taxing wealth rather than income, particularly on property, has advocates across the political spectrum.

Imbalances in housing wealth demand radical tax reform

OECD advice includes cracking down on tax evasion and ensuring property valuations are regularly updated

www.ft.com

 

[Chippy_boy]

In a small way, it's a tax on unearned wealth. If it were removed, house prices would simply go up to compensate, so nobody would gain.

Your points on impact on mobility are valid, though.

Taxing wealth rather than income, particularly on property, has advocates across the political spectrum.

Imbalances in housing wealth demand radical tax reform

OECD advice includes cracking down on tax evasion and ensuring property valuations are regularly updated

www.ft.com

It might have advocates, but I think it's immoral.

And if house prices went up to compensate (a fair point, although debatable whether they did go up the full amount), then your comment that nobody would gain is not true. The house sellers would gain, clearly. Money then passed on to other buyers, or saved or spent. It would be money which the government didn't get. The public would gain, at the expense of the government.

 

[roubaixtuesday]

It might have advocates, but I think it's immoral.

And if house prices went up to compensate (a fair point, although debatable whether they did go up the full amount), then your comment that nobody would gain is not true. The house sellers would gain, clearly. Money then passed on to other buyers, or saved or spent. It would be money which the government didn't get. The public would gain, at the expense of the government.

Immoral? Why? It's taxation, not religion.

The public as a whole wouldn't gain; taxes would need to be increased elsewhere.

The wealthiest people selling the most expensive houses would gain. Unless taxes on the rich were increased elsewhere, the poor and/or middle classes would lose.

 

[Chippy_boy]

Immoral? Why? It's taxation, not religion.

The public as a whole wouldn't gain; taxes would need to be increased elsewhere.

The wealthiest people selling the most expensive houses would gain. Unless taxes on the rich were increased elsewhere, the poor and/or middle classes would lose.

IMO, if someone has acquired something fair and square, then it is immoral for the government to seek to simply take it, or a chunk of it, off them. It's like legalised theft IMO. Tax on earnings is not the same thing at all, again IMO.

And do the poorer house buyers not pay stamp duty? I think they do.

Anyway, this silly side argument is a distraction from the basic premise that it is a stupid, counter-productive tax that damages the economy and mobility and locks up housing stock. We'd be FAR better off increasing the basic rate of income tax and also raising personal allowances so that the less well off were not unduly compromised in us doing so.

 

[roubaixtuesday]

IMO, if someone has acquired something fair and square, then it is immoral for the government to seek to simply take it, or a chunk of it, off them. It's like legalised theft IMO. Tax on earnings is not the same thing at all, again IMO.

And do the poorer house buyers not pay stamp duty? I think they do.

Anyway, this silly side argument is a distraction from the basic premise that it is a stupid, counter-productive tax that damages the economy and mobility and locks up housing stock. We'd be FAR better off increasing the basic rate of income tax and also raising personal allowances so that the less well off were not unduly compromised in us doing so.

I don't agree at all with the premise that taxing unproductive wealth is immoral whereas taxing productive employment is moral.

Quite the opposite, in fact!

 

[Mr Kobayashi]

@Chippy_boy why don't you start a charity to pay the SDLT for cash-strapped millionaires?

 

[inbetween]

From a distance, I’d say you have become a nation driven by resentment and spite, full of people looking for a handout, not a hand up!

I agree that the NHS is a crown jewel and should be protected, as medicine in America is a profit-driven commodity full of middlemen taking a massive cut, but beyond that I see a nation with too many people who want SOMEONE ELSE to pay for their free ride!

Government collects money via taxation. In England, it appears to have become such a “rich person’s problem” because so many want so much for giving so little, yet someone has to pay. Hence, greater and greater “progressive” taxation.

As they say in government circles, if you need revenue, you’ve got to get it from where the money is! Home price inflation is a gift to the Inland Revenue, which is why they reinvented Stamp Duty recently!

In essence yes we do now have a number of people looking for handouts but that's probably because many people have lost hope and confidence. A good reason why is globalisation has replaced the jobs that many once did and now they're left with a bargain bucket of what's left. Think Detroit and multiply it's decline by a whole region. The UK is very poorly regionalised compared to the US where each state and major city has its own strengths.

If you don't live near London then the opportunities peel away rapidly and in some places they're non-existent. We don't have a Silicon Valley or financial powerhouse that sits outside of the south and London. The oddity about the south though is people down there earn far more however their housing and living costs are greater so they're not even better off for it.

I actually don't believe that we have a taxation problem, the real problem is the lack of opportunity and everything that should bring. That lack of opportunity comes down to the lack of infrastructure because companies are lacking what they need in order to invest. Why would a company invest in a region which still has WW2 railway lines? It takes longer to travel between Manchester and York (80 miles) than it takes to fly to Spain.

The only reason why the UK didn't collapse into insignificance long ago is because it has a massive financial and service powerhouse in London. This is also therefore why much of the critical spending is concentrated down there.
If we raised taxes and gave them more money then they'd probably use it to build a golden elevator in Canary Wharf.

People shouldn't want to take money off the rich but that's all they have really and I can sort of understand it. What is really needed though is an infrastructure revolution to give people the jobs, security and opportunity which means they can at least be comfortable in life. If that happens then they won't need to cry for handouts.

(sorry mods for going off-topic)

 

[BrianW]

It is possible that with AI advances, there will be so many thrown out of work or reduced to the minimum wage that a universal basic income (handout) will have to be given to everyone to prevent societal collapse. We are in wholly uncharted territory. Even people like artists and writers are being challenged by AI, let alone 'ordinary' workers.

On Saturday I had lunch with an old friend who is working all the hours God sends in a private sector role of reasonable seniority. She is working that hard and that long because she needs to demonstrate to her bosses that she is worth keeping on. And guess what, her team is dealing with AI and its shortcomings. The AI is learning to the point where it does not need to be told what to do. The only issue is it can't (yet) deal satisfactorily with the new branches they are opening.

Talk about taxes on income may well become moot in the not-too-distant future, as there will not be any meaningful income to tax. So the burden will have to shift to wealth as there is nowhere else to go.

 

[Vic]

Yes you have, it's just it doesn't fit your narrative, so you choose to ignore it.

To spell it out - not that it needs spelling out since you know this as per above - World macro economic events have a HUGE impact upon a country's economy. We entered 2010 on the back of a global banking crisis that had left the UK with a then unsustainable debt burden, one that was rapidly rising due to the also huge budget deficit. After years of trimming of government spending, and the economy finally starting to recover, we've then had Brexit, COVID, the war in Ukraine, massive hikes in energy prices and huge inflation rates and interest rates, which have massively increased our national debt and the costs of servicing it. At the same time, NHS spending in particular had gone through the roof.

This imbalance between government expenditure and income OF COUSE has implications for the amount of tax it must raise to try to balance the books.

Only an uninformed buffoon could not understand this. And I assume you are not one.

Still no idea why you talk about the 20th century.

Sticking to the 21st century, just explain for me why our national debt went massively up between 2010 and Covid, while Germany's fell by a similar amount.

 

[Chippy_boy]

Still no idea why you talk about the 20th century.

There's no mention of the 20th century in the post you quoted. Maybe I posted 20th instead of 21st by mistake earlier? Dunno, don't care. You clearly knew what I meant.

Sticking to the 21st century, just explain for me why our national debt went massively up between 2010 and Covid, while Germany's fell by a similar amount.

Ask Len Rum ;-)

Seriously, I am sure you DO understand the difference between debt and deficit? Cameron inherited from Brown, a budget deficit of around (IIRC) £150bn per year, i.e. every year, the national debt was increasing by £150bn. That is a supertanker you cannot just stop on a sixpence. The Tories set about making cuts to public spending in order to slow the supertanker and decrease the rate at which the debt was increasing year on year. But obviously until the deficit is zero, the debt always increases.

With a debt of say £1Trillion and deficit of say £150bn on day1 (i.e. the government spending £3bn PER WEEK more than they take in) then how on earth can the debt NOT be more than £1Trillion, 1 year later? Did you advocate even greater austerity, to get the deficit down quicker? I doubt that.

And had they NOT made the cuts, then the debt would have risen even faster and higher, obviously. Now we can discuss whether austerity went on too long, but that's really a separate debate.

Now, as to why Germany did better?

Their economy is not so Financial Services oriented, so their bank bailouts were not as horrendous as ours and
they went into 2010 running a budget SURPLUS not a deficit, so of course that meant their debt was falling. Different economies have different dynamics, of course. And now, with its huge automotive sector, the German economy is in trouble with massive businesses like Bosch losing money, whereas ours is not so much. Swings and roundabouts.

I had a couple of spare mins so thought I would annotate a graph. From the mid 90's, debt to GDP was falling, initially under the Tories and continuing for a couple of years after Blair won in 1997 (green).

The period 2000 to 2008 (red) however was pretty appalling, with debt rising during a period of strong economic growth. That is really bad - you should be paying down your debts in the good times, building reserves. And allowing debt to rise during recession - investing in infrastructure etc to boost growth.

The massive increase in debt from 2008 to 2010 (amber) however was unavoidable. Brown had no choice other than to bail out the banks, or millions of people would have lost their life's savings.

Similarly, when Cameron got in in 2010 (amber), debt continuing to rise was absolutely unavoidable given the deficit he inherited. Debt unavoidably was bound to increase.

That was followed by a short period of declining debt to GDP (green) from around 2015/16. And then COVID (amber) and again, unavoidable massive increase to fund furlow and also there were falling tax receipts.