What? Has Idle turned pinko? Has he chucked the towel in on his Friedmanite beliefs? Did Laffer plot the curve upon his graph in vain?
Worry not, idle reader. I don't mean US, I mean THEM. There's local, home-grown rich; and then there's international, Johnny Foreigner rich. And it's Johnny I'm after.
Torygraph blog today:
"Nearly six in 10 overseas millionaires named residential property in London as their favourite asset class, according to Bill Siegle, a senior partner at international estate agents Cluttons. He said: “Quite remarkably, 43pc of these highly mobile investors state that the global financial crisis has had no impact on their view of London as a top investment target location. In fact, almost a third – or 29pc – goes on to claim that London is better-placed because of the Eurozone difficulties.
The fundamentals of the London economy remain strong; the city attracts dynamic businesses and skilled professionals from around the globe. This gravity effect underpins the city’s appeal to wealthy individuals looking for investment opportunities in the next 12 months.”
Well, we know what effect this has had on London property prices, and it has been vertiginous. Most importantly, it prices Londoners out of their own market. It makes no earthly sense to allow the international market unfettered access to our real estate if it is detrimental to one's own citizens.
So I say: TAX THEM TIL THEIR EYES WATER. And then tax them some more. If they are happy to pay 20% stamp duty to buy in London (and by THEY, I mean those who are not tax resident in this country), plus a 5% annual surcharge on top of their council tax, then one could review it and push it up to 30% and 7.5%. Etc, etc. My theory is that the Exchequer will receive a HUGE increase in tax take, whilst reducing the number of new foreign buyers. And if, one day, not only the Idle Tax, but political governance and property rights in their own godforsaken countries improving to a level that stops them from 'investing' in our capital - well, that'll be a jolly good day for London and the World, won't it?
I am a markets man, but I believe in intervention when it cures an obvious anomaly. This seems to me to be such an opportunity, and I can't for the life of me see any downside.