Anthony Hilton: Ed Miliband’s proposal for 10p tax band is alarming

Doing some homework for a radio phone-in on Ed Miliband's proposal for a 10p tax band on Thursday, I was shocked at just how high the mansion tax would have to be to pay for it.

There are only about 70,000 houses worth more than £2m and about 25 million taxpayers looking for a share. So supposing the 10p tax band covered the first £1,000 of taxable income it would cost about £2.5bn to give everyone £100 a year. Not that many would actually get that, because among the lower paid it might well trigger an offsetting claw back of state benefits.

But raising the £2.5bn from mansion owners to finance even that paltry change would mean those with houses worth £2m or more would each need to find £35,000 a year each.

Mr Miliband got his headlines just as elections loom, but the idea needs a lot more thought. There are better ways to help the lower paid and tax the wealthy.