Hitting the roof
Published 08/12/2012 | 05:00
• What I find interesting about the property tax is the element of time travel it invokes. Essentially, it is aimed at rich people living in big houses and we feel that by making them suffer – even if it raises little money – it'll make society fairer. Apparently, if you attack one sector it makes the other sector better disposed toward them (worked in Bosnia?).
The tax is a low-income, vote-winning strategy and that's fair enough. The time travel arrives because typically a person living in a big house is someone who about five years ago thought he was rich and borrowed enormous sums of money to buy this big house. Since then, his income has collapsed and the house has become worth, say, one-third of the mortgage.
This means he can't sell it, give it away or burn it to the ground. The bank (which is the Government) won't allow him to do anything except pay as much as possible out of his reduced income toward the massive loan, even though he'll never have equity in the house again and he will in the end die insolvent, regardless of what insolvency punishments we dream up.