In response to an FT article by Vanessa Houlder, Jim Pickard and Kate Allen on 27th June 2014, entitled 'Mansion tax to spark valuation disputes'
To mansion tax or not to mansion tax? Let's put this into a context. I'm sure other readers will have their own lense, but this is the one I'm looking through:
We live in a world where overnight money, particularly in the US, is virtually free. This creates a dream world for speculators, the carry trade, the super-rich, and the 1% - the only folks who can afford mansions. It also allows the Central Banks to monetize governmental debt, which enables politicians to avoid making structural changes to our welfare and warfare programmes, or to the monetary system itself, which is a giant debt-based Ponzi scheme.
Thus our governments close their eyes, hold their noses, and keep kicking the debt can down the road, storing up bigger and bigger problems for our children and grand-children, who will be asked to meet the unfunded liabilities currently tucked away off balance sheet. The grand children are going to be less than enamoured with our generation, who they may understandably view as greedy, selfish halfwits. Ditto the grandparents are going to get a nasty shock when they receive far less than they were expecting.
But the current crop of bankers and politicians will be safely tucked away in their mansions.
If it sounds like I'm all for a mansion tax, nothing could be further from the truth! I see a plan to impose a mansion tax as a gigantic red herring, about the size of Moby Dick. A very clever, but incredibly short-sighted, populist tool for getting votes from us, the people, who would be far better served by policy makers being honest with us about the real structural changes and hard choices that need to be made - if we are to avoid a systemic collapse. When something can't go for ever, it won't. Mansion tax? Deck chairs and Titantic spring to mind.
"The greatest shortcoming of the human race is our inability to understand the exponential function" - Dr Albert Bartlett
"Sometimes I wonder whether the world is being run by smart people who are putting us on, or by imbeciles who really mean it" - Mark Twain