Expert Comment: A property wealth tax is now politically feasible

Abstract:

High prices of houses and land have distorted the British economy and impeded productivity growth, creating widening inequality and despair for younger generations. The time has come to begin to address this problem. For years it was thought that the influence of property owners made reform politically infeasible. However, economic and political circumstances have changed. The government urgently needs to announce revenue-raising measures in the Autumn Budget. There is a widespread perception that too many ‘hard decisions’ of the last year have been borne by the vulnerable and less privileged. Proposals such as a 2% tax on total wealth over £10mn are now headline news, reflecting a greater appetite to redistribute the tax burden onto broader shoulders. I propose a two-part solution to the fairer taxation of property, to encompass a reform of the most expensive Council Tax bands and a land value tax on the most expensive land (including unoccupied land).