Why property tax rises aren't the answer

When Tim Montgomerie first started calling for new wealth taxes I was horrified. Sweden has only just abolished its wealth tax after seeing hundreds of billions of kroner leave the country in capital flight over a number of years. Other countries have found wealth taxes are associated with narrow bases, high costs of collection and often very unfair treatment for different classes of assets. We should not replicate that here.

As his proposals have been refined though, it isn’t that bad. More bands would be a relatively reasonable way of making the Council Tax system more progressive. It might require a revaluation which would be politically toxic, and it would be a shame to take Council Tax further from being a simple charge towards local services — but it certainly wouldn’t create the horrible economic consequences of higher marginal rates on income or an outright wealth tax.