UKIP win Clacton by-election by a landslide

[The Don]

Nigel Farage's prestige has been enhanced by being included in the party leaders' debates leading up to the 2015 general election:

http://www.bbc.co.uk/news/uk-politics-29595529

UK Independence Party leader Nigel Farage has been invited to take part in a TV debate with David Cameron, Ed Miliband and Nick Clegg ahead of next year's general election.

The BBC, ITV, Sky and Channel 4 have announced plans to hold three debates.

One would involve a head-to-head debate between just the Conservative and Labour leaders, and another would include the Liberal Democrat leader.

The other debate would involve all three leaders plus Mr Farage.

I anticipate another session of pig-wrestling in which everyone else gets muddy and Mr. Farage enjoys it.

He will either divide and conquer the other three or he'll say something so outrageous in which case he'll unify them against him and allow him to claim that they represent "politics as usual" before Gish-galloping onto another subject. I find it entertaining and worrying at the same time because the normal rules about being worried about looking bad and/or being caught out in a lie simply do not apply to Mr Farage.

I'm also amused and fascinated at how a party whose policies are so reactionary have managed to portray themselves as revolutionary and how a leader who is an ex-banker is pitching himself as a man of the people. if it wasn't so serious it would be an enjoyable piece of political theatre.

 

[MikeG]

I note that the party leaders haven't signed up for this yet. I would be very grateful if they didn't.

 

[theprestige]

Surely the right to earn a living implies the right to receive a wage. Otherwise you're just a slave. But, dear me, wages are taxed. Well so are very large estates. Taxation of a transaction does not mean abolition or even disapproval of the right to engage in it. Taxation is required to meet the collective expenses of the state and of society. If there was no law, you would receive no wages. You have a duty to pay - a reasonable contribution - to this and other social costs.

Thanks. If the Don was questioning the right to transfer property untaxed, then I see your point. In my haste, I thought the Don was questioning the right to transfer property at all.

 

[ddt]

I hope you're right, but in their panic, both Cameron and Miliband may adopt UKIP-friendly policies to mitigate possible defection to that party. Miliband is already making UKIP style noises about immigration. That is the main danger, that UKIP may infect the larger parties without itself gaining a majority.

I hope I misunderstand, rather than misrepresent.

If the Dutch example of shift in politics, with first Fortuyn and now Wilders, is anything to go by, yes.

 

[Craig B]

Thanks. If the Don was questioning the right to transfer property untaxed, then I see your point. In my haste, I thought the Don was questioning the right to transfer property at all.

He seems to imply that taxing a transaction is equivalent to removing the right to engage in it. If that's a mistaken interpretation I would be grateful if he could clarify his meaning.

 

[Darat]

I reckon we'll start to see a few more hiccups for UKIP which will be as a result of its leader's ego getting bent out of shape. He's been the entire focus of any reporting about UKIP now he will soon be the 2nd choice for the media since they now have one actual MP. He won't like not being the centre of attention.

 

[The Don]

He seems to imply that taxing a transaction is equivalent to removing the right to engage in it. If that's a mistaken interpretation I would be grateful if he could clarify his meaning.

I was questioning the right to transfer property untaxed after death, not the right to transfer property

 

[Craig B]

I was questioning the right to transfer property untaxed after death, not the right to transfer property

There is no more right to do that, than there is to receive a salary untaxed. That is to say, a government is not acting oppressively if it taxes these things. Property transactions are a legitimate subject of taxation.

Here are some non-legitimate ones, because they are imposed on things which have no clear monetary value.

Taxes were applied to such things as facial hair and traditional dress; these absurdities only angered the population and impelled Russians to evade taxation.

Peter in 1717 introduced the so-called "soul tax", demanded that a more accurate census be taken, and combined several classes of peasants and serfs into a single taxation group ... As the new universal tax was uniformly applied to workers, children, and the elderly, a family's few working members were expected to pay tax for those relatives unable to work due to age or infirmity.

Peter the Great, Russia. See https://cs.uwaterloo.ca/~smaclean/peter.pdf
Thatcher imitated his errors, if not his cruelty in imposing them, with her Community Charge.

 

[malicus]

I reckon we'll start to see a few more hiccups for UKIP which will be as a result of its leader's ego getting bent out of shape. He's been the entire focus of any reporting about UKIP now he will soon be the 2nd choice for the media since they now have one actual MP. He won't like not being the centre of attention.

I don't think he has to worry, UKIP and Farage are the number one story of the next seven months. From 'kingmakers-in-waiting' to 'car-crash-waiting-to-happen' and all points in between. On election day +1, well, maybe.

Only the EU Hokey Cokey can run it close for media attention.

 

[MCel58]

Except that we are now in the run up to a general election so he will be absolutely in the foreground and according to the UK press yesterday may even be asked to contribute to the leaders debates on TV.

 

[The Don]

There is no more right to do that, than there is to receive a salary untaxed. That is to say, a government is not acting oppressively if it taxes these things. Property transactions are a legitimate subject of taxation.

Yes I know. I was responding to this post from MikeG

And the guy who has worked all his life to afford that house loses the right to pass it on intact to his children, whereas the same guy, in the identical house, 200 miles away, can leave it to his kids untouched. Yeah, I get your idea of fairness now.......

And asked why is the right to pass on assets intact (i.e. without tax) a right.

 

[The Don]

He seems to imply that taxing a transaction is equivalent to removing the right to engage in it. If that's a mistaken interpretation I would be grateful if he could clarify his meaning.

I'm not sure where you get that impression. In this thread I've been arguing for the retention of inheritance tax and my "body of work" on this board has generally been in favour of comparatively high levels of progressive taxation.

I have highlighted what I feel are a number of flaws in the implementation of some taxes. For example, the implementation of stamp duty which means that a house which sells for £250,000 costs the purchaser £2,500.00 in stamp duty whereas one costing £250,001 costs £7,500.03 creates artificial barriers in the housing market around the stamp duty thresholds. Higher incremental rates with the higher rate only payable on values over the thresholds seems like a fairer approach to me.

 

[MikeG]

Thresholds are always a problem in all taxes. It would be perfectly straightforward to abolish them, have a flat rate of tax, and yet be progressive. Let me doodle for a few minutes......

 

[MikeG]

OK, whilst this isn't perfect, it illustrates that it is possible to be progressive with a single tax rate, without thresholds.

Let X be the sale price of the property in thousands. So, for a £150,000 property, X=150

If you imposed a property sales tax at (10% of X squared) you would get the following:

£100,000 sale.........tax = £1000
£200,000...............tax = £4000
£500,000...............tax = £25,000
£1 million...............tax = £100,000
£2 million...............tax = £400,000

If that didn't appeal because tax is payable on even the very cheapest property, you could define X as "sale price in thousands, minus (say) 100", leading to the above examples having tax bills of:

£100,000 sale price...............tax =nil
£200,000.............................tax = £1000
£500,000.............................tax = £16,000
£1,000,000...........................tax = £81,000
£2,000,000...........................tax = £361,000

I'm not suggesting this as a better alternative to the current system. I am just saying that thresholds don't have to exist to bring in progression. It also gets rid of the "mansion tax" nonsense, proposed by the Lib Dems, because that in effect is just another artificial threshold, and the nature of the squared relationship means that more expensive houses are really getting clobbered already.

Exactly the same principle could be applied to any tax, including income tax and inheritance tax.

 

[angrysoba]

I reckon we'll start to see a few more hiccups for UKIP which will be as a result of its leader's ego getting bent out of shape. He's been the entire focus of any reporting about UKIP now he will soon be the 2nd choice for the media since they now have one actual MP. He won't like not being the centre of attention.

I think that is distinctly wishful thinking.

 

[The Don]

OK, whilst this isn't perfect, it illustrates that it is possible to be progressive with a single tax rate, without thresholds.

Let X be the sale price of the property in thousands. So, for a £150,000 property, X=150

If you imposed a property sales tax at (10% of X squared) you would get the following:

£100,000 sale.........tax = £1000
£200,000...............tax = £4000
£500,000...............tax = £25,000
£1million................tax = £100,000

If that didn't appeal because tax is payable on even the very cheapest property, you could define X as "sale price in thousands, minus (say) 100", leading to the above examples having tax bills of:

£100,000 sale price...............tax nil
£200,000.............................tax £1000
£500,000.............................tax £16,000
£1000,000...........................tax £81,000

I'm not suggesting this as a better alternative to the current system. I am just saying that thresholds don't have to exist to bring in progression. It also gets rid of the "mansion tax" nonsense, proposed by the Lib Dems, because that in effect is just another artificial threshold, and the nature of the squared relationship means that more expensive houses are really getting clobbered already.

Exactly the same principle could be applied to any tax, including income tax and inheritance tax.

You're not really proposing a flat rate of tax because it's based on the square of the value of the asset. At very high values, the rate will exceed 100% which is not what you want I expect. In the case of the first stamp duty example, the stamp duty payable on a £10 million property is £10 million, that crossover happens at around £12 million in the second example.

Instead you're proposing a tax with an extremely large number of thresholds (there is a different tax rate for every penny).

As I understand it, the LibDem mansion tax isn't like stamp duty because it will be payable annually on properties over a certain value. As far as I am aware this will make it a property tax (like the community charge, although unlike the community charge it will fall on the property owner and not the occupier although I suppose that tenants could be made to pay by increasing the rate) and not a financial transaction tax. As far as I see it, there are a number of problems associated with the "mansion tax"

• Valuation - if it is due on properties valued over £x, it becomes virally important that valuations are accurate. Given the volatility in property prices, it is conceivable that small flucuations in local proprty prices can have big implications. The costs of valuing properties may make it onerous to collect unless there is a presumption of payment for properties on the cusp and it's up to the homeowner to demonstrate that the property isn't worth £x or more
• How to value multiple unit properties. If I own a number of flats in a building where the total value exceeds £x but the individual value of any does not then do i pay the mansion tax. Is there a difference if I own all the flats (and therefore in effect the whole building) or just some of them
• What about leaseholders ? I "own" a flat in Bristol except I don't, I only own a 996 year lease on that property and the freehold is owned by the property management company. Do leaseholders have to pay the mansion tax or is it the property owner (the freeholder) which may own multple properties in the same building (see above)

IMO it's a poorly thought out suggestion. If there's a desire for property owners with very valuable properties to pay more property tax then introduce more bands in the community charge. Don Towers is probably worth around £500k but is in the highest band of community charge. This means that we pay the same community charge as someone who owns this little pied-a-terre. If there was a desire to tax more valuable properties at a higher rate, introduce property bands X, Y and Z.

That said, I'm not unhappy with the current arrangement, the owners of that house will end up paying plenty of other tax (not least VAT on heating oil ). To put this in context, our community charge of a smidge under £3k is about a third of what my in-laws pay for their similarly priced [place in New Jersey.

 

[Dubious Dick]

Apologies to those who can't see this, but an excellent demolition job on Farage here:

http://www.bbc.co.uk/iplayer/episode/b04lxvrd/panorama-the-farage-factor

 

[angrysoba]

Apologies to those who can't see this, but an excellent demolition job on Farage here:

http://www.bbc.co.uk/iplayer/episode/b04lxvrd/panorama-the-farage-factor

Is this the same thing?



I'll watch it later.

ETA: Though it may seem a little unbecoming of the BBC to do a "demolition job" on a political party or candidate. Just ask the Scottish YES supporters.

 

[MikeG]

You're not really proposing a flat rate of tax because it's based on the square of the value of the asset. At very high values, the rate will exceed 100% which is not what you want I expect..........

It would take just a few minutes to work out a system in which the point at which it exceeded 100% of the sale price was many times higher than the highest value property in the country.

But that wasn't my point, as I said. I wasn't trying to design a new fair tax........I was simply illustrating that artificial thresholds could easily be eliminated by those setting our taxes, if they so chose.

And I agree with your critique of the Mansion Tax. Your suggested alternative fits in well with their commitment to devolving stuff as far as possible. It would produce extra funds for local authorities, rather than for the exchequer (although no doubt that would be hoovered up in a revised local government funding formula).

 

[The Don]

It would take just a few minutes to work out a system in which the point at which it exceeded 100% of the sale price was many times higher than the highest value property in the country.

But that wasn't my point, as I said. I wasn't trying to design a new fair tax........I was simply illustrating that artificial thresholds could easily be eliminated by those setting our taxes, if they so chose.

And I agree with your critique of the Mansion Tax. Your suggested alternative fits in well with their commitment to devolving stuff as far as possible. It would produce extra funds for local authorities, rather than for the exchequer (although no doubt that would be hoovered up in a revised local government funding formula).

My issue wasn't with thresholds (your proposed approach has in effect a new threshold at every penny) but rather with the present clunky approach at taxing the full value of the property above the threshold rather than the incremental value of the property on the grounds that in my example a single extra pound of asset value incurs an extra £5k in taxes.

With the mansion tax, I apologise if I gave the impression that it should be treated like community charge (which, reading the post is exactly what I said so you're right to have concluded that it's what I intended - the fault is in the writing not the reading or comprehension).

What I should have said is that if there is a desire to implement a Mansion Tax then whether it is collected by central government or local government (probably the former because otherwise rich areas who need the money least would benefit most) IMO it would be better:

• Having a comparatively small number of fixed value bands rather than a sliding scale. e.g. houses in band X would pay £x, houses in band Y would pay £y and houses in band Z would pay £z
• The band would be associated with the house and though it would nominally relate to the house value, there wouldn't be a volatile relationship to current house prices. Once my property is in a vale band then to move it between bands would require an appeal from me (if I think I am being changed unfairly) or from the agency making the cherge (if they think that the value is too low).

That said, I'm not in favour of a mansion tax because I think the hassle of collecting and administering it outweighs the benefits of collecting it.