Sam Bowman writing for the Daily Telegraph has called for abolition of Stamp Duty, calling it the worst tax we have.
This week we learnt that George Osborne’s 2014 reforms of the tax created nearly as many problems as they solved, reducing both revenues and transactions. It might well be the worst tax we have, and it generates less than 2 per cent of total tax yields. Forget reforming stamp duty – we should be scrapping the damned thing altogether.
The more buyers and sellers there are in a market the better things are for all of these people. Lots of buyers and sellers means more output for everyone, and competition keeps prices down. Stamp duty land tax is often what gets in the way. It is what economists refer to as a 'transactions tax', meaning that it gums up the system and adds costs to buyers and sellers of properties, putting both off that exchange.
The case against stamp duty is simple and powerful. It locks people into properties they don't want to be in and imposes huge costs on one of the most important purchases people will ever make. It is rightly resented by all who have to deal with it, and the forgone revenues would likely be made up for by the increased economic activity that scrapping would generate. The new Chancellor has a lot to do, but eliminating stamp duty should be top of his agenda.
Read the article in full here.