Abrahmsohn: Why Mandy was right to diss the Mansion Tax

Glentree boss Trevor Abrahmsohn thought Lord Mandelson was just a “hobnobbing champagne socialist” before his performance on Newsnight this week. Now he’s not so sure…Lord Mandelson

And there we were thinking that Lord Mandelson was just a “hobnobbing champagne socialist” before his pronouncement on Mansion Tax as daft, crass and ineffective.

He is absolutely right you know and it is typical of the two “Eds” and their penchant for stealing other parties policies without giving the matter much pre-thought!   

They did this with the Tories Inheritance Tax Thresholds and then with Non-Dom payments and now The Mansion Tax (stolen from the Lib Dems).

The Tax is causing consternation amongst the aspiring Labour MPs and mayoral candidates  in the South (Diane Abbot, Tessa Jowell and Margaret Hodge, have been openly critical) such that Ed Balls had to hurriedly reduce the one per cent band between £2-3million to 0.3 per cent to try to quieten the howls of discontent.

The Party are going to pay a hefty price in the South for this ‘Folly de Grandeur”

Yes, in the Midlands and North they love a bit of “rich kicking” and what better sport to play than some politics of envy, but the Party are going to pay a hefty price in the South for this “Folly de Grandeur”.

Let’s put it this way, since this Tax is indiscriminate it will be the first time that you would get taxed on your debt as well as your equity. Go figure that?

This means that, for instance, if you have a £5million house with a £3million mortgage, you effectively have £2million of equity but will nevertheless pay £30,000 per annum in Mansion Tax (closer to £60,000 per annum before tax).

If you contrast this against someone who owns a £2million house (without a mortgage) they won’t pay any tax at all, yet they both own the same amount of equity between them. The former will be paying a Tax on their mortgage and this will be the first time in living memory that  any administration has tried to tax debt. Even Ted Healey (the former Labour Chancellor ) would shudder at the thought. 

The spectre of Mansion Tax is hanging like a black cloud over the market and if the Election favours the Labour Party, resourceful wealth creators will be ‘running for the hills’ and Britain PLC will be a great deal worse off!

Stop these lunatics now before its too late!

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