Don’t panic! Stamp Duty™ Will Solve Everything!

Honestly, is there a more disproportionately over-politicised tax? Two problems with this ‘ere idea of Darling, darling!‘s idea to temporarily suspend stamp duty.

1. It won’t work, according to Dr Cable.

2. It won’t work, according to Everybody Who Has A Job And Lives In A House.

Our Vince’s problem is that artificial boosting is the last thing we need in an overheated market that badly needs to be allowed to recover naturally (though he qualifies this carefully in a CiF piece on Northern Wreck, stressing that he is “not arguing for laissez faire” and that mortgage lenders should observe a strict code of conduct when dealing with arrears etc etc). It will also harm the tax take further at a time of natural slowdown.

Everybody Who Has A Job And Lives In A House’s problem is that suspending stamp duty will be about as likely to have an impact on the decisions of the average first-time buyer as the economic stance of the Kingdom of the Potato People. It’s bonkers, this notion that in a market where the average house is worth a sum approaching 1000% of the average salary that the alleviation of a 1-5% sting in the tail is going to be the occasion for anything other than hollow laughter. And let’s be clear, Darling, darling!, first time buyers is what this is all about. If the government really is barking enough to want to kickstart an overheated market, then they’ve got to introduce significant supplies of fresh demand rather than start a game of state-sponsored musical chairs among existing home-owners. And they’ve chosen one of the Ways Least Likely to do it.

What are these people thinking? Not just the politicians who periodically try to make political capital out of lowering/scrapping stamp duty “to help struggling first time buyers”, but the journalists who apparently wipe their brains of everything they know off by heart at a dinner table for long enough to write a report on it with a straight face. Where does it end? Any chance the press team would consider testing the point with a press release explaining how the Liberal Democrats plan to help struggling farmers by giving them all a free packet of Baby Bio?

Sometimes I wonder if I am an alien sent here for the purposes of research with a modified memory which  is getting a bit worn and needs a new Imporosity Patch, and so memories of the economic circumstances of my home planet keep leaking through (whaddya mean, you never get that?) Because the one, the only, the sole way this insane proposal would make sense would be if everybody was paid in bubble mixture and a decent house costed a small handful of lentils and stamp duty was compulsorily rendered in bits of yellow string, and it was generally possible to achieve an barter rate of 1,000 lentils per pot of bubble mixture but yellow string was absolutely unobtainable unless you were a lentil quadrillionaire. Is this how it works on earth, then?


  1. Camoron’s policies on inheritance tax and this utter shite do more than anything else to show his true nature. He actually seems to believe* that people like him are everyday, normal people struggling by on an average middle-class income. The true abomination of the Daily Mail has been to convince your average middle earner that this is true, when they in fact have more in common with those on low incomes.

    I personally, speaking for myself, would raise inheritance tax and green taxes to pay for the raising of the income tax threshold and the abolition of VAT. The “libertarians” and Cameroons want to burden the poor with regressive taxes whilst enriching and entrenching themselves, which is why they are liars.

    Of course the problem is raising IHT might not gain much revenue, and the media liars would make it electorally unpopular, even if the majority of people would benefit from tax cuts for the actual meaningful things they do like working and conducting trading relationships with each other, the latter of which Thatcher imposed a stealth tax on, the former Tory governments never manage to reduce because they always bring about rises in unemployment and crime, thus creating a social need for more spending.

    This is why I get wound up with the claim that because someone “genuinely believes” something it should be “respected”. It is often aired in connection with religion. But why should I respect a view if I think it’s bollocks, or give a fuck if it’s “sincerely” held if it is indeed bollocks?

  2. Does ‘a Whitehall source today said’ = a Treasury leak? If so, why oh why?

    If deferred stamp duty won’t solve either the housing problem or the credit problem, surely floating the idea means the gov’t lose if they go ahead with it, and get pummelled by the opposition and media if they don’t?

    (cf. the 2007 general election)

  3. Stamp duty should be abolished, but on principle, its not a real fix for any of our current problems with house prices which largely stem from artificially reducing the available housing stock through planning regulation and the land monopoly.

    Personally I’m not bothered about inheritance tax that much (although like income tax it is affecting more people than it was originally designed to, bringing in less well off people more and more).

    Green taxes should be /at cost/ not more (so fuel duty is too high according to Stern I believe, others are too low). Raising them above the cost of the pollution will distort the market and lead to many negative unintended consequences.

    I’m glad asquith put libertarian in quotes, no real libertarian wants to burden the poor with taxes, we want to remove the poor from taxes even more than many liberals, the libertarian views the state as hindering the prospects of the poor not helping.

    Lastly, in reply to Asquith again – the media tells people what they want to hear, it follows opinion rather than leading it. An awful lot of people are already opposed IHT so the media follows them to sell itself.

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