What affect would taxing second homes have on the economy

[hurfdurf]

One day the student will be the retired?

If he's expecting his care to be paid for by the current retired guy then he's going to have a problem.


This whole disparity thing kinda solves itself in time given the first graph

Rather than dividing people between retired and not retired, should we not divide between the haves and have nots.

It seems ridiculously unfair that the retired person, who was given far more opportunity than the current worker (affordable housing, free Uni, ability to support a family easily on 1 wage), who is still reaping those benefits, now off the back of current workers who don’t have those same benefits, should pay less into the society they are actively benefiting from and earning from.

 

[hurfdurf]

This whole disparity thing kinda solves itself in time given the first graph

explain? As the graph says to me that working no longer pays for a house, how ever, landlords who did purchase affordable houses when they were affordable are now being given an easy ride and will be able to purchase more houses off the back of their renters paying their rents.

 

[SpeedFreak]

Rents would go up.

In what world is there some magic line between haves and have nots? Like everything, it is a scale and therefore any approach would need to reflect that scale.

 

[hurfdurf]

They aren't paying a student loan because they have paid it off.

Most home owners didn’t have student loans. They purchased homes when they were affordable, because of government subsidies and investment that no longer occurs, and because they had the benefit of the giver paying for Uni.

They aren't paying NI because they have already paid it their whole life and once you hit retirement age no longer is it a requirement.

There are ways in which those still earning handsomely from a society should pay back into it, without harming those who have paid in and are not now earning big money in retirement.

Are you saying that pensioners should pay NI? And that once you have paid off your student loan you should just keep paying more on top?

No, blanket statements like that are foolish.

 

[hurfdurf]

Rents would go up.

In what world is there some magic line between haves and have nots? Like everything, it is a scale and therefore any approach would need to reflect that scale.

I mean, the disparity between the affordability of houses and social programs the previous generation had post WW2 vs what the current generation get today is pretty stark. Affordable housing, low pension age, free Uni, plenty of council housing, right to buy, work paying a family a living wage on one salary.

The generations that had it all off the back of the greatest generation and then pulled the ladder up now contains people who are earning fantastically off the backs of the current generation. Is it not fair to want to tax them some what?

 

[Quartz]

Rent controls need to be in place.

Rent controls have proved to be a disaster everywhere they have been implemented.

It's quite apparent how the rich poor divide is widening.

I saw a graph recently on Quora (which of course I cannot now find) which showed that the wealth curve for millennials is just the same as for the boomers. Their time will come.

 

[Simon]

A perfect example of the attitude of the Brits and their tunnel vision for their own personal enrichment at any cost. The factory owner doesn't care a hoot about his employees, and would pay them nothing if he could get away with it. He probably campaigned against min wage in the first place. He view his employees like you'd view a pair of boots or a calculator. A tool, nothing more. He cares nothing for their welfare nor for his responsibilities toward them.

If he can outsource production he will. It will mean he can own a bigger house and more premium cars. That is all he cares for.

This is the prevailing mindset in this country. There is no other goal than to enrich ourselves. So sick of it all. So very sick of this selfish country and its selfish people.

Which country are you moving to them

 

[413x]

Rent controls have proved to be a disaster everywhere they have been implemented.



I saw a graph recently on Quora (which of course I cannot now find) which showed that the wealth curve for millennials is just the same as for the boomers. Their time will come.

I don't believe it. Home ownership etc is all well down, and mortgage rates have no lower to go.

I also doubt it's so even. Net wealth as a total across the cohort probably is set to rise. Inheritance has to go somewhere. But as the rich get richer that median figure is probably moving further from the average.

 

[Tefal]

Rather than dividing people between retired and not retired, should we not divide between the haves and have nots.

It seems ridiculously unfair that the retired person, who was given far more opportunity than the current worker (affordable housing, free Uni, ability to support a family easily on 1 wage), who is still reaping those benefits, now off the back of current workers who don’t have those same benefits, should pay less into the society they are actively benefiting from and earning from.

Like I said that problem solves itself.


In a bit more time the retired guy is dead and gone.


The poor worker who didn't have those benefits is now retired


What is the new workers situation?

Is he better off than the current day workers were?

Is he worse off?

Because your argument is based off this weird blip in history.

 

[Tefal]

explain? As the graph says to me that working no longer pays for a house, how ever, landlords who did purchase affordable houses when they were affordable are now being given an easy ride and will be able to purchase more houses off the back of their renters paying their rents.

They die, everyone alive is back to the equal playing field.

Saying make the old people pay for it all, is just another way of saying.

You want them to pay for it now as the young can't afford it, then when your old you will demand the young pay for it as you and the other old people can't afford it.


It's just a way to dodge the issue for one more generation instead of fixingit

 

[b0rn2sk8]

I don't believe it. Home ownership etc is all well down, and mortgage rates have no lower to go.

Id expect it’s because property prices are outgrowing inflation. It’s almost certainly skewing the measures because they are housing is not included in how we measure inflation and the figures are adjusted by inflation. So those who have properties will be massively skewing the results against those who don’t. The average wealth isn’t really a great measure either because it can be skewed by small numbers of people with a huge amount of wealth (think tech billionaires who are relatively young). Other statistical measures are better.

They die, everyone alive is back to the equal playing field.

Not really, unless everyone leaves their estate to charity, those families who ‘have’ will continue to ‘have’ and further concentrate wealth. There is fairly strong evidence of your family has some wealth, you are much more likely to end up in a similar or better position.

 

[Tefal]

Id expect it’s because property prices are outgrowing inflation. It’s almost certainly skewing the measures because they are housing is not included in how we measure inflation and the figures are adjusted by inflation. So those who have properties will be massively skewing the results against those who don’t. The average wealth isn’t really a great measure either because it can be skewed by small numbers of people with a huge amount of wealth (think tech billionaires who are relatively young). Other statistical measures are better.



Not really, unless everyone leaves their estate to charity, those families who ‘have’ will continue to ‘have’ and further concentrate wealth. There is fairly strong evidence of your family has some wealth, you are much more likely to end up in a similar or better position.

Inheritance tax would quickly bleed away the consolidated houses that were bought when houses were cheap

 

[413x]

Id expect it’s because property prices are outgrowing inflation. It’s almost certainly skewing the measures because they are housing is not included in how we measure inflation and the figures are adjusted by inflation. So those who have properties will be massively skewing the results against those who don’t. The average wealth isn’t really a great measure either because it can be skewed by small numbers of people with a huge amount of wealth (think tech billionaires who are relatively young). Other statistical measures are better.



Not really, unless everyone leaves their estate to charity, those families who ‘have’ will continue to ‘have’ and further concentrate wealth. There is fairly strong evidence of your family has some wealth, you are much more likely to end up in a similar or better position.

Agreed. As fewer people have more wealth (which is the path we are on) that net figure just grows. But is distributed more unevenly.

It's been hard to get an average home on an above average wage with no kids. But for those on a below its much much harder.

I doubt any politician is brave enough to meddle with housing.. Until maybe a strong majority are renting.

 

[b0rn2sk8]

Inheritance tax would quickly bleed away the consolidated houses that were bought when houses were cheap

I’d disagree with the word ‘quickly’ as there are ways and means of avoiding IHT, the obvious one if to pass on the asset before you die. The first £500k of the house you live in is also tax free of you have less than £2m

Almost all wealthy people do IHT planning very early in their lifetime.

 

[hurfdurf]

Inheritance tax would quickly bleed away the consolidated houses that were bought when houses were cheap

They die, everyone alive is back to the equal playing field.

Saying make the old people pay for it all, is just another way of saying.

You want them to pay for it now as the young can't afford it, then when your old you will demand the young pay for it as you and the other old people can't afford it.


It's just a way to dodge the issue for one more generation instead of fixingit

Have you looked at the data that shows population growth vs social housing or housing in general being purchased? It’s utterly backwards.

Houses are not being built at near enough of a rate, and social housing construction has all but stopped.

Your logic would work out if everyone who died then meant someone got a home, but that is far from the case, as people have multiple children. The population is growing. Not enough houses are being built which means house prices keep going up.

The people who are now in retirement had lots of social housing built for them by the previous generations. They then stopped that whilst reaping that benefit, it’s time they paid up and got houses built for the generation they bought into this world.

 

[Scam]

Interesting stat that Nish Kumar brought up on the Daily Mash last night, confirmed here; One in five over-65s in the UK is classified as a millionaire

The more I think about this new NI hike the more I get angry. I think the generational divide is getting worse and making younger people become more blasé about their finances because, ya know, what's the point in saving when Brian and Maureen's semi-detached literally earned more than you last year? But I also think there's probably a good element of them thinking "well the boomers ***ed us over so we're gonna do what we want, we can't afford kids anyway so **** everyone who comes after us". Sad state of affairs really.

 

[413x]

Interesting stat that Nish Kumar brought up on the Daily Mash last night, confirmed here; One in five over-65s in the UK is classified as a millionaire

The more I think about this new NI hike the more I get angry. I think the generational divide is getting worse and making younger people become more blasé about their finances because, ya know, what's the point in saving when Brian and Maureen's semi-detached literally earned more than you last year? But I also think there's probably a good element of them thinking "well the boomers ***ed us over so we're gonna do what we want, we can't afford kids anyway so **** everyone who comes after us". Sad state of affairs really.

We've peaked. That seems to be long and short of it. In terms of pure wealth we are now on the decline.
NI increase is a bit disgusting though. But tories were voted in by the very people who are gonna take the hit. Can't blame them really.
It's also a sign of desperation. Like a supermarket taking out 1 cherry from the jar but keeping the price the same. You can't do it forever.

This puts home ownership further away. And yeah I'm also not surprised people will just say **** it.
Which will push the rich poor divide further. Eventually you'll have to tax the wealthy. As they will be the only ones with anything to tax.

But I guess by that point there will be some reset, house price crash, economic breakdown, rebellion.

I said to my partner with fake news and basically everyone being sheep democracy is on shaky ground.


The stamp duty break and NI rise hit the youngest hardest. Its just plain wrong. Wonder how bad voter apathy is going to get.

 

[Quartz]

I don't believe it.

I didn't at first but I remember it checking out.

Home ownership etc is all well down,

Have you adjusted for age?

But as the rich get richer that median figure is probably moving further from the average.

What you're missing is that the poor are getting richer too.

But I guess by that point there will be some reset, house price crash, economic breakdown, rebellion.

Housing pressure is created by increasing population. The UK's population was 49 million in 1951 and an estimated 69 million today. That's a 40% increase. Absent immigration the population is now naturally declining, so this is a problem that will resolve itself over the next century or so.

 

[Lopéz]

what's the point in saving when Brian and Maureen's semi-detached literally earned more than you last year?

Do you think that this is what people think?

Maybe that do if they're as thick as two short planks.

 

[fez]

The fundamental issue with everything wealth related is that there is no way to allocate blame, taxation etc fairly.

Its the same reason there is no such thing as fair benefits. People are different.

One of the couples we are friends with are in about 20k worth of negative equity in their flat that she has owned for over a decade and are the only ones our age (mid-thirties) who don't own a house. They have a combined income of about £120,000 / year. They are awful with money. They could easily end up at retirement age without a house, without a good retirement and in need of help. Should they get it? They have earned about 3x the average salary over their lifetime so why should they get help over someone who has earned 1/3 of that but has been frugal and sensible.

This is the problem and this is the balancing act. You should not punish people for being prudent and saving. If I lost my job tomorrow and couldn't work for 5 years I would get the same help as someone who hasn't put anything into the system through taxes. Thats not fair either. They would take any serious savings I have and use them against me when working out what pitiful amount I get.

They need to do something but taxing the young to pay for the old is certainly regressive and shouldn't happen. You also shouldn't tax people based on assets as that again is a tax on people who are sensible for the most part. We should be looking to tax businesses properly and tax the rich more and close all the loopholes they use. Tax should largely be at point of earning. That means that whatever you do with it afterwards is up to you. You earn X, you pay Y.