Housing inequity, Wealth Inequality, and Budget Stress

The confining of virtually the entire population of the UK has highlighted the precarious housing and wealth inequalities that face many communities. Many people, particularly BAME, LGBTQ+, and other marginalised communities, have found themselves confined to unfit accommodation too small to fit their needs, unable to afford better accommodation. The housing crisis has never been more acute than when everyone needs a home to which they can be confined. Yet, homes are less affordable than ever, and many young people‚-especially from marginalised communities‚-realistic economic hope of owning their own home, and hence no expectation of accumulating the wealth and capital that comes with home ownership. The inequity in the system has never been more apparent; getting more people their own homes is more important than ever. Meanwhile, the existing wealth in property is inefficiently and poorly taxed by council tax, meaning that existing homeowners can accumulate wealth at a relatively lower tax rate than the income which is the only source of wealth for non-homeowners. This inequity in the tax system exacerbates the inequality, and contributes to unaffordable house prices. It also creates pressure to discourage new building, because the gains from owning a piece of scarce housing supply are so valuable and tax-efficient. The tax system is thus regressive in the worst possible way. Finally, the total freeze in the economy prompted by COVID-19, which has resulted in the government paying the wages of a large part of the workforce, has highlighted the precarity of revenues dependent on income tax. Over the long term, the government needs new sources of revenue and a more effective taxation system in order to fund the sort of drastic measures that might be needed in a future pandemic, especially because, in future, bond markets might be less generous to the UK.




Leave a Reply

%d bloggers like this: