Masters of Money

[doomage]

We already have a property tax it's called "Council Tax", and people and companies get taxed on rental income.

If it was a property tax then only the owners of the property would pay the tax, not us poor renters.

This would push down house prices, which is a good thing. Far too much 'money' is sitting in property. Free this up and the economy will get moving again.

[VectraMan]

Watched the Keynes episode last night. I'd never heard this before, but Keynes was part of the British delegation to Germany after WW1 and part of the discussions on how best to rebuild Europe. But he was completely against the idea that Germany should be forced to pay any war reparations, arguing that a defeated nation was in no position to pay, and forcing them into poverty could only leading to building bitterness and hatred which would probably end in another catastrophe for Europe.

Clever bloke.

[SueEllen]

If it was a property tax then only the owners of the property would pay the tax, not us poor renters.

At the moment all this would do is increase your rent.

This would push down house prices, which is a good thing. Far too much 'money' is sitting in property. Free this up and the economy will get moving again.

Unlikely - house prices are falling in some areas and the economies aren't moving there.

[Robinho]

Everyone borrowed too much..

Thanks to this...

[Robinho]

If it was a property tax then only the owners of the property would pay the tax, not us poor renters.

This would push down house prices, which is a good thing. Far too much 'money' is sitting in property. Free this up and the economy will get moving again.

I'm a big advocate of the LVT (land value tax).

Essentially all the country is is a bit plot of land. So instead of taxing people for being productive via income, corporate, VAT etc they should pay rent on the land they use.

[sasguru]

Essentially all the country is is a bit plot of land. .

Really? That is all a country is, is it?
I'm sure my 4 year-old has a more sophisticated grasp of economics than you.
At least he knows about incentives, negotiation, probabilities of success and such like

[doomage]

At the moment all this would do is increase your rent.

Agreed, but there is a natural ceiling to rents (i.e. actual earned income), unlike house prices (which is related to the cost of money - how much will banks lend etc). In the long term a property tax should discourage property speculation which is a prime candidate for root cause of the credit crunch (albeit aided by poor regulation of the banks coupled with a disastrously low interest rate policy). Also it might bring about some forced selling, which is what the market needs to get moving again.

Unlikely - house prices are falling in some areas and the economies aren't moving there.

Maybe prices are falling maybe but have transactions increased? If it gets to the point when houses start trading hands at a decent clip again, then you know that prices have corrected to the point where the average punter will have enough spare money left at the end of the week to start buying other stuff again. If rents / rates come down for businesses too there will be an upswing.

Nobody seems to want this scenario but me it seems.

[Robinho]

Really? That is all a country is, is it?
I'm sure my 4 year-old has a more sophisticated grasp of economics than you.
At least he knows about incentives, negotiation, probabilities of success and such like

Says SAS, the person who thinks protectionism boosts an economy.

[Robinho]

At the moment all this would do is increase your rent.

Wrong. Rent is already at what the market will bear thus taxing property owners won't change that, they will take the tax hit not the tenants.

What would increase rents would be if by adding a tax there, we freed it up elsewhere meaning people have more disposable income and could bear to pay more rent. If you didn't free it up elsewhere though it wouldn't change rents.

[SueEllen]

I've done it! I've done it!