La envidia es delgada porque muerde pero nunca come.

 As the State seeks to take more – it gets less.

A statement usually applied to central government taxation  policy and given truth by the Laffer curve, the basic idea of the curve is  that there is a tax rate that maximises collected revenue, and that tax rates above this optimal level actually lead to lower collections due to disincentives for work and invest with the result economic activity decreases , reducing the available income to tax. High rate tax payers simply stop their taxable activities as they no longer see the advantage of working or investing.

This is a statement the truth of which should be blindingly obvious but which our government, national and local, seems to have a Ray Charles like ability not to see and a dogmatic intent to not understand.

What drives this?

Poor economic grasp?, political philosophy? both? Maybe mixed with simply envy of the success and possessions of others?

Let’s examine an example that has in the last year taken hold across many coastal areas; the imposition of double council taxation on second homeowners. Superficially a move to protect the local resident population from hyperinflation of house prices and the destruction of the local long term rental markets by the growth of holiday lets. By doing this the authorities stated mission is to advantage the fully resident population and reverse the long term depopulation trend of the young moving away.

Maybe it is more than superficial – a look at house price inflation in these communities over the last 10 years clearly supports any argument that prices are rapidly becoming out of reach of locals who earn largely minimum wage salaries; local rentals are also becoming both scarce and expensive as land lords switch to servicing the lucrative holiday maker demand. It is in many cases true that the full-time resident population of coastal villages that offer the sea, sand and sun experience has fallen and aged dramatically with as few in 1 in 20 houses having 365 day occupants.

On this basis squeezing out the affluent second homeowner or at least squeezing out extra money from them to support the community is both equitable and sensible? Either they sell on mass, prices fall and locals can re enter the market to purchase and rent or, they pay and the local council has extra funds to support better services – what’s not to like? Its a win/win.

Well a few things…

Firstly the latter curve works at this level as well as on national taxation – push them too hard and these people leave. They are there by choice not necessity and they are the ones who buy the run down cottages that predominate in these locations, spend on their renovations, employ the local builders, electricians, plumbers and spend in the shops, public houses, restaurants that all rely on their disposable income and will to spend it.

Secondly, who is going to buy and continue to support what are very often high maintenance properties? The locals currently lacking rental options or maybe the government agencies currently scooping up properties across the country by purchase or long term rental offers no individual can compete to house the migrant asylum seekers the National Government is desperately seeking to clear from hotels?

The loudest community voices promoting this tax raid are usually those who are immune from its impacts – those of an age who have comfortable mortgage free houses and lifestyles of their own they seek to protect, who have the time to take objection to the seasonal flood of holidaymakers, traffic clogging their streets and the other “negatives” of being a “destination”. Who have the time to campaign for equality – so long as they are not affected by it.

The truth is that the young within these communities don’t leave simply because of house prices or lack of rental opportunities. They move for opportunity, education, better employment. These are the core building blocks that these communities have lost and that the exit of second homeowners will not restore.

The coastal communities of this country are depopulating and in some cases decaying because of decades of under investment by governments of all stripes, the decimation of their fishing industries, closure of mines, automation of agriculture – not because "outsiders" choose to spend their time and tax paid money in these locations, on their housing stock and support of their hospitality businesses and shops.

Second owners on average out spend local residents on these elective activities. They may not be there 365 days but on a wet, cold and wind blown day in January the streets of these communities will be as empty and shuttered without them as they currently are with them.

The answer to the very real issue of coastal community depopulation and failure is real investment – investment in real well paid jobs, in protection of their fishing and agriculture industries, the removal of their use as convenient dumping grounds for asylum seekers and the itinerants with dink and/or drug issues. And, an intellectual investment by central government in true understanding of how these communities at the edge actually function.

They are not suburbs of London, they do not have the value sets of the supposed inteligencia that  “govern”, they do not form part of the urban multiculturism.

They in large part what may be thought of as “old England” and that is not something to be discarded.

The reality of punitive taxation schemes such as double council tax is that it is both vindictive, envious of success and regressive. Its most likely long term result will be further withdrawal from these communities of their relevance and worth – it is at core an envy and as the  Spanish proverb that titles this piece says;

Envy is thin because it bites but never eats