Senor Chevalier

OK - am on hols and promised myself a week off - but a bottle of rosso di toscana at lunchtime and I can't resist the urge to debunk Huguenot. So ... H: However, this thread was essentially about asset stripping pensioners. SC: Well, yes, in your mind. To such an extent that you don't consider the arguments being put on their merits but react accordingly. H: This won't solve your housing problem SC: Solve, perhaps not. But by making more expensive houses more costly to uphold, a direct downward pressure will be applied to house prices which would clearly contribute in a tangible way to addressing the barriers to entry in housing that people are faced with. H: it won't shift the burden of taxation from 'youth', SC: er, well, actually I'm afraid that's bollox, taxing assets more and income less would in on average reduce the tax burden on young workers who are the people we are arguing deserve a better deal for. You can declare this not to be the case, but that would be manifestly incorrect. H: and it won't suddenly create a wondergul rosy future for our nation. SC: Yes, if you track back through this thread you will see that the goal of those arguing for some sort of adjustment to the status quo then you will see it as all about the rosy-tinted utopia where people hold hands and sing songs and cuddle puppies etc, etc. Or Not. Non-argument and complete nonsense as you well know.

H: Se?or C I don't think it's reasonable to claim that the economic challenges faced by today's youth can be heaped upon a small group of wealthy pensioners, nor solved by dispossessing them of their homes. SC: Can we please move away from this bloody pensioner rhetoric - I am not saying that at all. What I am saying is that a certain cohort have a tough deal and need a reduced burden. In order to maintain a constant tax take then there is no other option but for the burden to shift to others. H: Just from a property perspective a better start would be to deprive middle aged aspirant tycoons of the tax breaks that allow them to snap up multiple homes at low interest rates and force young people into renting from them. The second primary cause is investors 'squatting' on empty property for a long term return. Tax should be aggressively imposed upon residential properties not used as the primary residence according to land value. SC: Fine with that too. H: Young people are never going to be able to buy Multi million pound houses forcibly vacated from pensioners, it's far more likely that this housing shortage is generated by young people wanting to single occupy entry-level premises. SC: Or even for them to buy a small basic terraced house in a relatively inexepensive parts of South London. H: It should also be noted that the housing crisis for youth is predominantly one of the South East. A better strategy than hammering pensioners out of their homes might be to engineer job opportunities elsewhere in the UK, where housing is plentiful and deserted, so that every 22 year old doesn't see moving to London as their only opportunity in life. SC: Job creation would be a neat trick. Others have tried and failed. I look forward to your plan. H: So rather than abuse pensioners with an unsupported envy tax that is unlikely to have any impact other than impoverishing people, you either you need to legislate to prevent Zeban living alone, stop property squatters, create jobs elsewhere or build more stock. You make your most important point in the first sentence where you describe it as an 'equalization tax'. Within this you emphasize the foundation of your argument. It is essentially a socialist goal for the redistribution of wealth from the bourgeoisie to the proletariat. There are no examples of successful socialist states in the world, so it seems illogical to state that pursuing their manifesto could have anything but a destructive impact. People need incentives - if you forcibly deprive them of the rewards for their labour, they simply won't work. SC: You're over playing this slightly (by an order of magnitude actually). I am not trying to cap wealth and this is not a political philosophy. It is just an objective comment (I would say that). I am simply suggesting to shift the balance of tax burden a bit. Maybe tax earners today what people 30 years ago were taxed and then collect the required extra over from everyone rather than the current workforce... I don't want to give feckless youth a free ride in a nice appartment - the entitled youth can absolutely feck off as well. I want to make it easier for hard workers these days to get somewhere. Your incentives argument is dead right (although also wrong) by making the deal for the youth of today so crap in terms of tax and asset prices etc there is no incentive for them. Whereas the previous genereation who are wealthier than they could have hoped for have been given a relative freebie they were not expecting. This is not what incentivised them and simply cannot be argued as such.

This is a question about tax, money, prospects rather than attitude, respect, riots etc. See the Mansion Tax thread for more details...

OK Huguenot. I take your point (to a point) but I do not agree that you could only describe it as an envy tax. You could describe it as many things, an equalisation tax perhaps. It really (really) it isn't a question of envy particularly. If (???) we accept that the current generation have it much tougher than the previous generation because of higher taxes now, tuition fees, a spike in asset prices etc.... (I don't think anyone is disputing this "fact" are they?) then are we really prepared to say that it is right that the hard work / luck of this generation is worth less than the hard work / luck of the past generation? So the question is - what on earth do we do with a whole generation that have a rotten deal compared to their predecessors? Do we just say - shit happens, you should have been born in the 50's, you weren't, life's a bitch? I personally think that it is very, very difficult for young people starting out and trying to make ends meet - the hill they have to climb is far steeper than it ever was before. And I do think that is a bigger injustice than applying some (a bit) tax on wealthy people (with the regrettable pensioner anecdote: that they need to sell their mansion and feck off to live in Cambridge with a bigger garden instead - I spent a few years there myself and it wasn't so terrible). By the way, I was born in the 70s so I am kind of neutral on all these things - I got a worse deal than my parents who mortgaged themselves to the hilt and bought a house in the 80s and got lucky. But I got a far better deal than the guys born in the mid 80s that are wondering if they will ever own a house. If we even it all out then I guess I'd personally stay in roughly the same place. So new question for Huguenot and Marmora Man to work on - what should we do with the youth of today? Figure that out and I'll stop trying to piss in your pension pot. Anyway - off on holiday so see youse all in a week or so...

Muddled and illogical - ouch. Magpie - not sure wat you are summarising, presumably LadyD's comments for which I agree MM's comment is probably a fair cop. But don't lump me in (if you are) just because I had 3 too many beers last night and got distracted by Loz's Cambridge side show. All I'm saying is a tax on assets over ?1m (or at some sensible level) including houses is not objectionable per se. Yes, yes, the poor long suffering pensioner... If they were living their life again 40 years later and did the same job then they would pay more tax and have a fraction of the net worth at the end of it. Is that fair on this generation of would be pensioners? So, to try to put it succinctly and in an unmuddled and unmuddling way: It would be fairer IMHO to shift the balance and tax the wealthy pensioner a bit harder (not to mention all the others with significant assets that are less emotive than our long suffering pensioners with their gammy knees) and tax income a bit less to redress the intergenerational imbalance. That's it.

Just let us know when you've saved up and I'm sure some of the diverse opinions on this forum as to what you should spend it on are as good as any financial advice you might get from a professional in a polyester suit. I certainly wouldn't pay for the advice as that's the only guaranteed way to lose money whether the advice is crap or not. For example at the moment the UK government index linked savings bond paying RPI + 1 % tax free is probably better than anything else going for a risk averse punter...and it has a 12 month lock in.

Loz wrote: But, assuming you mean the Lib Dems ?1m mansion tax (rather than general assets), why should someone who purchased a house in London for 900K in 2009 that rises to ?1.1m be taxed, yet someone in Cambridge who bought for ?300k in 1995 and rises to ?900k not be taxed? Why tax some 'good luck' and not other? And where does 'good luck' start and smart purchasing cease? SC: Agreed you could go after all capital gains if you like inc the folk in Cambridge. I'm not saying the system is 100% fair as this is unattainable but perhaps fairer than taxing the arse out of the current generation who have no chance? I'd say go after all of: hard work, good luck and smart purchasing, rather than just workers as at present. In any case, perhaps the relative value of sunny Cambridge would cause a London exodus and an end to crazy London prices. L: And again, how are we going to adjudge the value of houses on an annual basis. For instance, a house with four bedrooms is worth a lot less if you convert the smallest bedroom to a bathroom. Or knock a stud wall down to convert two bedrooms to one. SC: Easy - self declaration. Government has automatic option to buy your house off you at a 20% premium to declared value to keep people honest. If the consequence is that houses are relatively better furnished with bathing facilities then I can live with that. L: Anyway, it would be a brave politician who decided that the papers covering a constant stream of pensioners being forced from their homes is really going to endear them to the electorate. SC: Pensioners - f**k em. But I agree. The guys running the country have to win a popularity contest so the best policy is tempered by what will play well. Clearly running the country should be like jury service - thrust upon citizens at random. Or at least the people that get to run the country should have to compete in a chess contest or some sort of optimisation exercise rather than polling. I reckon my wife would make a good fist of it. She's quite bright and shows absolutely no interest in politics which are pretty much the key attributes I would look for. Edited as too many scoops tonight and rambling in places....

Nothing smart about the babyboomers and the houses they bought in the 80s. They got lucky. The application of cheap debt has created an asset bubble and the current generation are frozen out - they have to earn a preposterous amount to even think about getting on the ladder and they are being taxed to the hilt every step of the way. Whereas the previous generation paid lower taxes and set off the mortgage interest when they bought the cheap houses which are now worth a fortune. A lot of this was in the Inequality thread already. I don't see the issue with forcing people to downsize if they are lucky enough to be sat on big assets. Otherwise we are just saying that hard work is taxed whereas good luck isn't - WTF? Equally people sat in large houses could be able to accrue tax charges by gradually transfering their asset ownership to the state on the proviso that they are not evicted until death. The accrued tax can then be knocked off the value of the estate prior to calculating any inheritance tax.

It sounds like you are looking for a way to stop frivilous spending rather than seeking investment advice. Decide how much you need to live off and how much your monthly saving target is. Put the saving target to one side in an account you dont't touch at the start of the month and spend the rest. If you've gone over at the end of the month and raided your savings pot then you know you need to tone it down a bit and have to put more of your salary into the savings pot at the start of the next month to get back on target. You'll get it wrong the first few months but then figure it out. This method should work for you as it involves doing exactly what you do now - spending on an ad hoc basis and then scrimping at the end of the month - the only difference is you've put some cash aside and changed your reference point. If you struggle with self discipline then tieing money up in accounts that are difficult to access may suit you, though it is better to keep the flexibility if you have the self control.

Anderson Peckhamboy

Hot Stuff in Vauxhall is worth a crack if you are looking for that authentic experience - Tayyabs before it became overhyped...?

I thought the food there was actually not bad and whilst not exceptional - certainly better than Pizza Express. A Dulwich branch of Zucca was rather too much to hope for really. I would also comment that the light fittings were rather unattractive - they cast a good focussed light and seemed to be very flexible in terms of adjustments, don't get me wrong, but the fittings themselves were rather vulgar and distracted from the overall ambience. Function over form it seems which is not what I necessarily would have expected from Italians...

Asset If getting people out of their cars is the aim then why not make the roads for the exclusive use of buses and the disabled? The current system of pretending that they are for all to use and then spending increasing amounts of money to make them harder for all to drive down does seem rather odd.

Bil - I agree with your verdict on the best of both worlds approach balancing ED shops, Dulwich Park and transport links. I'd put more slightly emphasis on transport (daily use) and less on the park (weekends). The roads near North Dulwich station (I won't say the roads in North Dulwich) are pretty good from this perspective: Red Post, Ardbeg, Beckwith, Elmwood, Wyneham. Easy access to Denmark Hill, North Dul and Herne Hill stations, so King's cross, Victoria and London Bridge all within easy reach. Short jog through the village to the park. The hubub, tat and occasional delights of Lordship lane are a short stroll away so available on demand. Bit less lively though, and I gather that a lot of people there are unbearable snobs.

Hmm - good point. You're right. In that case blame Mars. ;-)

Glass pasta jars?

Erm - just checked urban dictionary.::o

Was the packet intact? If they had burrowed in then sounds like a storage issue rather than a manufacturing problem. I'd take it up with your confectioner.

SS40 - whilst you may be right - if you simply sit in ED imagining the snobbery of DV then I guess it doesn't matter whether the DV crowd are snobs or not - what's the difference?

Oh and I'm not just trying to help the poor suffering high income low wealth group - there are of course needier groups. However, making it easier for people to make something of themselves and for poor to become richer (and yes, rich people to become poorer) would improve social mobility. It would help in persuading young people that hard work pays as success would be attainable without a lottery win... Looked up the land tax wiki link. Actually seems like an incredibly good and dare I say it implementable idea should the asset tax plan prove too difficult.

Discovered these guys the other day http://www.taylor-st.com/ Absolutely awesome coffee though a bit of a pilgrimmage from ED.

Yeah, I'd need to get hold of some data to try to make a decent fist of the numbers. Starts to turn an interesting debate / distraction from work into something a bit more dull and work-like. The principal though in terms of the approach applied and the behaviours / consequences that follow should be the same whatever the levels and everything can surely be calibrated. But I disagree that people in the top tax bracket currently at 50% on incremental income are the same people I am necessarily trying to target. If someone in that tax bracket has assets of say ?300k then why should they be taxed as hard as they are? People with incremental tax of 50% could be earning ?150 - 200k. With a family to support, post tax they and living costs they are netting several 10s of thousands but not 100s of thousands. It therefore takes them 20 years of holding down a top job without getting sacked or burning out to accumulate the ?2m threshold I had proposed. Meanwhile there are plenty of people that are sat on property worth ?2m plus that have lower incomes. Is it right that the latter group contribute less tax than the former? Income and welath do not go hand in hand. If they did then I agree we should be indifferent whether to tax income or wealth as we target get the same people either way. The shift in approach I propose should make it easier for people to accumulate wealth but harder to keep wealth so that we reduce the disparity between richest and poorest and make it easier for people to start with nothing and do well for themselves. An interesting debate - I appear to be inadvertantly convincing myself that property is theft - not what I was necessarily aiming for...

OK - cross posting extravaganza. Re Huguenot 4:45 Philiosophically I'm not trying to make rich people poorer per se. But, I am trying to make poorer people richer and given the tax we need to raise is assumed to be constant then we are back to allocating the burden and yes I think rich people are better placed to pay it. Currently earners are being robbed of 20% or 40% or 50% of their income in tax. I am proposing to rob (in your words) a % of rich people's wealth. Is there a difference between this year's earnings being taxed and money I already have (whether earned or gifted to me) being taxed? I don't see it. I mean psychologically it is easier to never have been spoilt and then not know what we are missing. But there again some say better to have loved and lost then never to have loved... It isn't a revenge attack. It isn't motivated by a desire to lash out. I wish wealthy pensioners very well and hope to join them as soon as possible. But comparing the plight of the wealthy pensioner to the plight of the recent graduate trying to get on the housing market, I find myself more sympathetic to the latter group.

OK so we're agreed on the principles and now the trickier bit around implementation....?! :) We could have some sort of measure of lifetime tax paid (HMRC bound to have the data at their fingertips). If your assets are worth less than 4 (?) x tax paid then they are exempt from asset tax. That get's round the people getting kicked out of their home argument (unless they are freeloaders). Not sure we need this to be honest - tough luck! Asset valuation. This could be self-assessment with inspections and consequences. People will lie, just as they do on income tax, but the regime of inspection and consequence needs to have teeth. For house prices, I like the idea of the government exercising expropriation rights, by exercising a call option over property at some prmium (20%?) to declared asset value. Oh you think your house is worth ?2m do you - well here's ?2.4m, can I have the keys please? Overseas issues - this is where it probably all comes tumbling down. HMRC tries to tax UK Dom individuals' worldwide income at present and probably misses more than half of it. The same ham fisted approach could apply to assets. I think the bigger overseas issue, is a competitiveness of UK compared to other countries argument. It's always the way though with tax systems and would clearly be easier if all systems were the same or if we put a wall around the country but neither is feasible. The "UK competitiveness" argument is getting a bit tired anyway - kind of who cares after a point...?

Asset tax would reduce house prices. Your argument is quite neat, but like most economic theory makes implicit assumptions which I don't think hold. If everyone has all assets in cash and then the tax system is introduced and then has to choos their asset allocation then I am with you. Rich people will have a certain asset portfolio value as will poor people. The tax payable will be fixed for each person and independent of asset allocation hence no impact. However, if we shift to an asset tax system the tax burden will shift from high income low wealth people to high wealth low income people. People sat on assets that are disproportionately high when compared to their income will need to liquidate a portion of their asset base to meet the tax. To an extent this will mean selling property and this is where the downward pressure comes from. ETA: i.e. individual asset values and therefore personal wealth will change - it is not a zero sum game.