It's rather odd, the idea that wealth accidentally acquired should be sacrosanct, while it's fine to tax worked-for income
Sometimes I wonder if Vince Cable likes occasionally to yell "Mansion tax!" in a similar spirit to that which "inspires" people to settle down to an evening of committed internet trolling – just to enjoy the annoyance that it causes, and see if anyone can be prodded into saying something outrageous in return. Certainly, the cry of "Mansion tax!" does seem to rouse the most unlikely of people to absolute paroxysms of misguided self-pity.
Like many British people of a certain age, my admiration and love for the journalist and broadcaster, Joan Bakewell, is Darcy-like in its intensity. Except on this particular matter. Bakewell was extremely quick off the mark in this round of the dynamic and thrilling game of "Mansion tax!", taking immediately to the welcoming pages of the Telegraph to complain bitterly of the unfairness of it all.
Bakewell's sad tale is that, 48 years ago, as a newlywed, she bought a run-down house in a decrepit London square for £12,000. That's not quite the bargain that it appears, as the average price of a house in the UK that year was £3,300. But, anyway.
Alas, a terrible thing happened to Bakewell's modest abode. "Over the decades, and with no effort on our part, the area has been transformed, and so have the prices. Houses in the Primrose Hill area fetch well over a million these days and are snapped up by pop stars, TV chefs and hedge fund managers."
Weirdly, however, even though Primrose Hill is no longer the dingy and mouldering sort of area that the young Bakewell was to keen to inhabit, even though a whiff of disapproval of those nouveau riche neighbours can be detected, Bakewell appears to have rolled well with the endless punches that gentrification has rained on her.
She has adapted so well to the changed circumstances forced upon her, in fact, that Bakewell hopes to leave Primrose Hill, "in a wooden box".
If a mansion tax were introduced, however, Bakewell fears she would have to sell. It's certainly possible that some homes in Primrose Hill could be clobbered for a goodly amount. Houses of Bakewell's type, in Bakewell's location, do indeed sell for "well over a million these days". They sell, in fact, for up to £4m, and probably more. It is ghastly indeed to be facing your declining years with nothing but a £4m house to show for it, to be "capital rich and cash poor".
Actually, there are many things that can be done under such circumstances, without having to move. One could divide the house, selling a chunk for £2m, and continuing to live, capital- and cash-rich, in part of it, free of any worry about ever falling foul of mansion tax. Or one could rent out part of the house, using the rent to pay the tax. These solutions have the added advantage of putting a roof over somebody else's head – no small matter, when London is in the grip of a housing crisis. One consequence of that crisis is that homelessness in England has jumped by 14% in the past year alone. Another, new research from ancestry.co.uk shows, is that "the number of households with three or more generations of the same family living under the same roof has reached levels not seen since Victorian times". This too, is an option for an extended family wishing to hang on to a house that is liable for a mansion tax. Increasing numbers of ordinary people, of course, are finding that they have little choice in the matter.
Nevertheless, despite the privations of those unable to get on to the "property ladder" at all, the idea that one may be lucky to have a grand and valuable home, and lucky to have a useful and valuable exploitable asset, is strangely unpopular. This sort of wealth must be protected, retained for purely private enjoyment, whatever hardships those who missed out on this unwelcome success in investment may be suffering.
The general argument seems to be that since homes in London, and in some other parts of the country, became so valuable without much in the way of intentional speculation, then a mansion tax would be punishing people for mere good fortune. It's rather odd, the idea that wealth accidentally acquired should be sacrosanct, while it's fine to tax worked-for income at least a quarter, and up to 50%. In fact, it's rather counterintuitive. John Stuart Mill believed that unearned income should be taxed more highly than earned income, not less, and I do, too.
This position does seem controversial though, particularly whenever there is talk of denting the private wealth that was created during periods of house-price inflation. In the middle of the last decade, there was a giant wave of outrage about inheritance tax. The threshold when Labour came to power in 1997 had been £200,000, and was increased to £285,000. It's now £325,000, and some people argue that this is still too low. Now, to me, when people earn an average of less than £25,000 a year, £325,000, tax-free, seems considerably better than a poke in the eye with a sharp stick. But, again, the so-called problem is that people who have the misfortune to have inherited houses worth a lot of money may be forced to sell them to pay the tax, or even, perish the thought, just raise a mortgage on their asset, and pay it every month, like "normal" home-owners. It was the same when Labour tried to tackle the social care crisis by suggesting a compulsory insurance scheme. This was dubbed a "death tax" with Andrew Lansley, then safely in opposition, declaring that it would "discourage saving, and could leave those with the most modest savings facing inheritance tax at nearly 100%". Nope, I don't have a clue what he's on about either.
It strikes me that in this modern Britain, this post-class meritocracy we're supposed to inhabit, more and more people wish to claim aristocratic status. Not for them the cutting of cloth according to its width, with a family home for when one is bringing up children, and a smaller home for when that phase of life is over. No, it seems instead that the more valuable the home is, the more valuable the memories within it are, and the more of an outrage it is to expect it to be treated as an object in a market, and not a private and personal memory palace, or family seat.
I don't suppose a mansion tax will ever "come in". The expenses scandal taught us that MPs of all parties are the last people to tamper with the sense of entitlement home owners often display.
But I can't help feeling it's a funny old society that breeds Labour peers who cannot see that the property boom was incredibly socially divisive, and declare that while other sorts of wealth should be taxed, their sort of wealth deserves to be looked on as idiosyncratic, almost a cruel twist of fate, to be gazed on kindly, and with affectionate sentimentality.