IMF's property tax hike proposal come true with UK imposing "mansion tax" as soon as this year

[rangerrebew]

IMF’s Property Tax Hike Proposal Comes True With UK Imposing “Mansion Tax” As Soon As This Year

By wkchild on March 22, 2014   • ( 2 )

Editor’s Note: Still think the Banksters are not in control?  Think again, and get ready more and more of this desperation to keep the Ponzi alive…

Submitted by Tyler Durden on 03/22/2014 09:50 -0400

One could see this one coming from a mile away.

It was a week ago that we highlighted the latest implied IMF proposal on how to reduce income inequality, quietly highlighted in its paper titled “Fiscal Policy and Income Inequality“. The key fragment in the paper said the following:

Some taxes levied on wealth, especially on immovable property, are also an option for economies seeking more progressive taxation. Wealth taxes, of various kinds, target the same underlying base as capital income taxes, namely assets.

…

And in a world which as Zero Hedge first defined years ago as shaped by the “fairness doctrine“, the one word that was so far missing from this article, can be found momentarily:

“There’s a consensus among the public that a modest additional levy on higher value properties is a fair and reasonable thing to do in the context of further deficit reduction,” he said. “It’s important that the burden is shared.”

There you have it: “fair.” Because there is nothing quite like shaping fiscal (and monetary) policy based on what the du jour definition of fair is to 1 person… or a billion. Especially if that billion has a vote in the “democratic” process.

It gets betters:

…

Well, they will simply draw a redline above any number they deem “unfair”, duh. As for the London housing bubble, it may have finally popped, now that all those who bought mansions in London will “suddenly” find themselves at the “fair tax” mercy of yet another wealth redistributionist government.

Unfortunately, for the UK, the “mansion tax” idea, , gloriously populist as it may be, may be too little too late.

As we reported late last week in “The Music Just Ended: “Wealthy” Chinese Are Liquidating Offshore Luxury Homes In Scramble For Cash“, the Chinese offshore real estate buying juggernaut has now ended courtesy of what appears to be China’s credit bubble bursting. So if the liquidation wave truly picks up, and since there is no greater fool left (you can forget about sanctioned Russian oligarchs investing more cash in the City in a world where asset freezes and confiscations are all too real), very soon London may find that there is nobody in the “fair” real estate taxation category left to tax.

But that’s ok – because that’s when one simply expands the definition of what is fair to include the not so wealthy… and then again…. and again.

Finally, if anyone is still confused, the IMF-proposed “mansion tax” is most certainly coming to the US, and every other insolvent “developed world” nation, next.

Read Full Article Here: zerohedge.com

http://wchildblog.com/2014/03/22/imfs-property-tax-hike-proposal-comes-true-with-uk-imposing-mansion-tax-as-soon-as-this-year/

[Oceander]

Viz. the US: any federal property tax would have to be apportioned amongst the states in proportion to population (as per the census) because such a tax is a direct tax under Supreme Court precedent.

[rangerrebew]

Viz. the US: any federal property tax would have to be apportioned amongst the states in proportion to population (as per the census) because such a tax is a direct tax under Supreme Court precedent.

I'm thinking precedent doesn't mean as much as personal opinions in our legal system today.

[Oceander]

I'm thinking precedent doesn't mean as much as personal opinions in our legal system today.

Not so.  Not on a matter such as this.  It would have to be put in place much more indirectly than a mere ad valorem property tax.  One way, of course, would be to impose tax on the sale of real property in such a way that it was essentially a proxy for a hypothetical ad valorem tax imposed each year but not collected until the time the real property is sold or otherwise disposed of in a taxable transaction.  And yes, it can be done, even though the mechanics would be ugly:  the current tax code does something very analogous with so-called PFICs (passive foreign investment companies).

[EC]

Point one - I find it hard to give credence to a poster named Tyler Durden. I assume there is an agenda in the offing.

Point two - never heard of stamp duty? It's a tax. Based on the valuation of your home, not the market value, but the rateable value which is usually 20% higher. You pay it when you buy it or inherit it - and I'll tell you now, it goes through first. You could pay the vendor up front, in cash, but until the stamp duty is paid, the place is not yours.

[Oceander]

Point one - I find it hard to give credence to a poster named Tyler Durden. I assume there is an agenda in the offing.

Point two - never heard of stamp duty? It's a tax. Based on the valuation of your home, not the market value, but the rateable value which is usually 20% higher. You pay it when you buy it or inherit it - and I'll tell you now, it goes through first. You could pay the vendor up front, in cash, but until the stamp duty is paid, the place is not yours.

I've heard of them all the time.  Let's don't start confusing the various taxing regimes.  The federal estate tax - about the closest we get to a federal property tax - is constitutional because it's regarded as an excise tax on the privilege of passing property on to heirs; that's why it's imposed on the estate and not on the heirs.  The states impose a variety of different taxes as well, most notably the annual property tax.  Assessment values for real estate under the various state regimes vary wildly; that variation doesn't really matter so long as all properties are assessed on the same methodology.  I.e., saying that the rateable value is usually 20% higher than market value doesn't really matter because the same amount of tax could be arrived at by applying a slightly higher tax rate to a slightly lower valuation.