B1463 – Property Tax (Repeal) Bill 2019 Watch

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Saracen's Fez
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B1463 – Property Tax (Repeal) Bill 2019, TSR Libertarian Party
Property Tax (Repeal) Bill 2019

An Act to repeal property tax from the finance bill 2018

BE IT ENACTED by The Queen's most Excellent Majesty, by and with the advice and consent of the Commons in this present Parliament assembled, in accordance with the provisions of the Parliament Acts 1911 and 1949, and by the authority of the same, as follows:—

1. Repeals
(1) Section 4 of B1440 is hereby repealed.

2 .Short title, Commencement, Extent
(1) This act may be cited as the Property Tax (Repeal) Act 2019
(2) This act comes into force upon Royal Assent
(3) This act extends to the UK


Notes
The tax targets people living in London and those who have kept a property in the family for many generations. For example, a house bought in London for half a million when this MHoC created would now be worth over 1 million. It has doubled in value. For a family who saved for years to be able to afford that London house, this new taxes pushes them out of their houses because their property values have exponentially grown.

Even worse, let's take a young couple who bought an average-sized, detached family house in Birmingham in the early 90s, they would now be paying this tax given the ridiculously high price increases. In reality, millionaires will see the charge as pocket change and won't really care that much. The middle classes will be further squeezed because they were lucky with their property investment.

The biggest dodgy assumption used is that all properties taxed are worth £1m, this we know to be false. For instance 3 years ago, during the 2015 general election campaign, the number of properties estimated to be over £2m sat at approximately 100,000, if we assume that all properties worth at least £2m are exactly £2m and there has been no increase in properties worth at least £2m then we have an additional £1bn revenue.

Furthermore, the tax was poorly implemented with too many flaws. Who determines how much a house is valued at? What happens if estate agencies gang up to undervalue houses on purpose to protect their wealthy clients?At the moment, wealthy individuals can own two houses and choose which is their legal address. A wealthy person could buy a million-pound mansion and a semi-detached house. They make the semi-detached their legal address so in the eyes of the law 'nobody is in employment' in the mansion. They avoid paying the tax. Because nothing is defined, the tax is incurred by everything. You could argue a millionaire in an expensive flat in the Shard pays the tax based on the value of the Shard itself, not the cost of the flat.

Cost
(£3bn)

Repeals
https://www.thestudentroom.co.uk/sho....php?t=5704614
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Saunders16
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I will wait to see the debate, but I do note that this is a relatively costy repeal.
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Jammy Duel
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(Original post by Saunders16)
I will wait to see the debate, but I do note that this is a relatively costy repeal.
Costly, but removes a burden from a lot of people who are asset rich but not high income, those who are not victims of house price inflation by the policy being repealed, those who are genuinely well off can easily get around it
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Jarred
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No. Many people in the country work extremely hard every day just to pay off the mortgages of a landlord far richer than they will ever be and not be able to save up for a house of their own for that very reason. My point is that people owning million pound houses are among some of the richest in society. This includes those in the south east where such a home is grand, but not exorbitant. They are still doing well for themselves. As such I will not shed a single tear for them having to give a little something back to society. Far stronger still: I certainly do not give a **** about people who simply inherited their rich man’s house through no merit of their own having to pay a teency bit extra in tax.

The most I would possibly support is a replacement with a banded LVT which could similarly target the land owned by the richest while having a less negative impact on behaviour of home owners around the boundary. I would also accept regional differences due to the huge variance in house prices across the country.
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Jammy Duel
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(Original post by Jarred)
No. Many people in the country work extremely hard every day just to pay off the mortgages of a landlord far richer than they will ever be and not be able to save up for a house of their own for that very reason. My point is that people owning million pound houses are among some of the richest in society. This includes those in the south east where such a home is grand, but not exorbitant. They are still doing well for themselves. As such I will not shed a single tear for them having to give a little something back to society. Far stronger still: I certainly do not give a **** about people who simply inherited their rich man’s house through no merit of their own having to pay a teency bit extra in tax.

The most I would possibly support is a replacement with a banded LVT which could similarly target the land owned by the richest while having a less negative impact on behaviour of home owners around the boundary. I would also accept regional differences due to the huge variance in house prices across the country.
So these hard working people should be taxed very heavily simply because they or their working class parents had the audacity to purchase a house in an area that now has very high property prices. Case in point Islington has over 10,000 houses worth over a million and yet the average wage is below the national average. The genuinely well off can incredibly easily avoid paying the tax, those [un] fortunate enough to have been able to buy these properties decades ago who remain in low incomes cannot. The only way to see this as a food tax is if you are fundamentally against home ownership, preferring everyone without the means to simply leave to be stuck in a rent trap
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Connor27
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Aye - property taxes are an awful regressive and anti-aspirational measure.
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CatusStarbright
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(Original post by Jarred)
No. Many people in the country work extremely hard every day just to pay off the mortgages of a landlord far richer than they will ever be and not be able to save up for a house of their own for that very reason. My point is that people owning million pound houses are among some of the richest in society. This includes those in the south east where such a home is grand, but not exorbitant. They are still doing well for themselves. As such I will not shed a single tear for them having to give a little something back to society. Far stronger still: I certainly do not give a **** about people who simply inherited their rich man’s house through no merit of their own having to pay a teency bit extra in tax.

The most I would possibly support is a replacement with a banded LVT which could similarly target the land owned by the richest while having a less negative impact on behaviour of home owners around the boundary. I would also accept regional differences due to the huge variance in house prices across the country.
The loophole in section 4 makes the tax pretty pointless and ineffective in the first place however, as stated in the notes:
"At the moment, wealthy individuals can own two houses and choose which is their legal address. A wealthy person could buy a million-pound mansion and a semi-detached house. They make the semi-detached their legal address so in the eyes of the law 'nobody is in employment' in the mansion."

This also addresses Saunders16's point that the repeal is costly - it seems that the figure for the revenue the policy gains is likely to be massively overblown given this loophole.
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Jarred
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(Original post by Jammy Duel)
So these hard working people should be taxed very heavily simply because they or their working class parents had the audacity to purchase a house in an area that now has very high property prices. Case in point Islington has over 10,000 houses worth over a million and yet the average wage is below the national average. The genuinely well off can incredibly easily avoid paying the tax, those [un] fortunate enough to have been able to buy these properties decades ago who remain in low incomes cannot. The only way to see this as a food tax is if you are fundamentally against home ownership, preferring everyone without the means to simply leave to be stuck in a rent trap
In a word, yes. That a person was working class many moons ago is irrelevant if they now possess a large amount of wealth. In a similar sense, person A from old money and person B from generic northern mining town should both expect to pay the same income tax today if they both now earn 150k.

You can somewhat argue that a person earning exorbitant income is doing so through graft and merit. Simply being gifted a house by mummy and daddy is the very antithesis of a meritocratic/hard-work-always-pays/land-of-opportunity capitalism. Taxes on hoarded wealth are necessary (but not sufficient) to prevent a sort of “dictatorship of the bourgeoisie” (eurgh even I’m annoyed at myself for writing that) where the wealth concentrates among a powerful few. Obviously that’s the world we live in already and I don’t see that changing without an undesirable economic system but we can and should make baby steps. This tax is one of those.
(Original post by CatusStarbright)
The loophole in section 4 makes the tax pretty pointless and ineffective in the first place however, as stated in the notes:
"At the moment, wealthy individuals can own two houses and choose which is their legal address. A wealthy person could buy a million-pound mansion and a semi-detached house. They make the semi-detached their legal address so in the eyes of the law 'nobody is in employment' in the mansion."

This also addresses Saunders16's point that the repeal is costly - it seems that the figure for the revenue the policy gains is likely to be massively overblown given this loophole.
That is indeed a horrific implementation detail, but one we should strive to fix rather than completely throw away the opportunity to rake in a potential 3 billion.

Also if these people are so rich that they can just buy a second house on a whim to avoid tax then that justifies why a (better implemented) tax like this needs to exist. Furthermore this House should not be dedicating itself to giving a tax break such super wealthy individuals when so many others struggle
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Mr T 999
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(Original post by Jarred)
No. Many people in the country work extremely hard every day just to pay off the mortgages of a landlord far richer than they will ever be and not be able to save up for a house of their own for that very reason. My point is that people owning million pound houses are among some of the richest in society. This includes those in the south east where such a home is grand, but not exorbitant. They are still doing well for themselves. As such I will not shed a single tear for them having to give a little something back to society. Far stronger still: I certainly do not give a **** about people who simply inherited their rich man’s house through no merit of their own having to pay a teency bit extra in tax.

The most I would possibly support is a replacement with a banded LVT which could similarly target the land owned by the richest while having a less negative impact on behaviour of home owners around the boundary. I would also accept regional differences due to the huge variance in house prices across the country.
Did you read the notes? Seems like you haven't.

The mansion tax won't affect the millionaires it's nothing but pocket change to them. The problem with the tax is fails to take into account of the household income. It unreasonably assumes everyone living in a million pound house is automatically a millionaire. This of course is false considering there will be of lower middle class household who earn below 100k. Who just happen to be lucky with their property investment and house price inflation which inflates the value of the house exponentially.

The tax targets people living in London and those who have kept a property in the family for many generations. For example, a house bought in London for half a million when this MHoC created would now be worth over 1 million. It has doubled in value. For a family who saved for years to be able to afford that London house, this new taxes pushes them out of their houses because their property values have exponentially grown.

Even worse, let's take a young couple who bought an average-sized, detached family house in Birmingham in the early 90s, they would now be paying this tax given the ridiculously high price increases. So why should these people be forced to pay the tax when in reality they are not wealthy? It affects them the most.

Furthermore, the tax was poorly implemented with too many flaws. Who determines how much a house is valued at? What happens if estate agencies gang up to undervalue houses on purpose to protect their wealthy clients?At the moment, wealthy individuals can own two houses and choose which is their legal address. A wealthy person could buy a million-pound mansion and a semi-detached house. They make the semi-detached their legal address so in the eyes of the law 'nobody is in employment' in the mansion. They avoid paying the tax. Because nothing is defined, the tax is incurred by everything. You could argue a millionaire in an expensive flat in the Shard pays the tax based on the value of the Shard itself, not the cost of the flat.

So why support a poorly implemented tax? Why not join us and vote for this repeal. This tax can be done much better.
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SoggyCabbages
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Although a noble idea, it is rather costly and I would rather this be implemented in a budget for example, where the effect on the exchequer could be balanced out.
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Mr T 999
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(Original post by SoggyCabbages)
Although a noble idea, it is rather costly and I would rather this be implemented in a budget for example, where the effect on the exchequer could be balanced out.
It is not costly at all given the loophole that allows the wealthy to choose their primary residence. So they could own a million pound mansion and detached house and declare the detached house as their primary residence. Thus, the households in the mansion we be declared unemployed and avoid paying the tax. This figure stated is massively overblown given this loophole. So it in facts fails to raise adequate funding. That's how poorly implemented the mansion tax is in the budget.
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Jarred
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(Original post by mr T 999)
Did you read the notes? Seems like you haven't.

The mansion tax won't affect the millionaires it's nothing but pocket change to them. The problem with the tax is fails to take into account of the household income. It unreasonably assumes everyone living in a million pound house is automatically a millionaire. This of course is false considering there will be of lower middle class household who earn below 100k. Who just happen to be lucky with their property investment and house price inflation which inflates the value of the house exponentially.

The tax targets people living in London and those who have kept a property in the family for many generations. For example, a house bought in London for half a million when this MHoC created would now be worth over 1 million. It has doubled in value. For a family who saved for years to be able to afford that London house, this new taxes pushes them out of their houses because their property values have exponentially grown.

Even worse, let's take a young couple who bought an average-sized, detached family house in Birmingham in the early 90s, they would now be paying this tax given the ridiculously high price increases. So why should these people be forced to pay the tax when in reality they are not wealthy? It affects them the most.

Furthermore, the tax was poorly implemented with too many flaws. Who determines how much a house is valued at? What happens if estate agencies gang up to undervalue houses on purpose to protect their wealthy clients?At the moment, wealthy individuals can own two houses and choose which is their legal address. A wealthy person could buy a million-pound mansion and a semi-detached house. They make the semi-detached their legal address so in the eyes of the law 'nobody is in employment' in the mansion. They avoid paying the tax. Because nothing is defined, the tax is incurred by everything. You could argue a millionaire in an expensive flat in the Shard pays the tax based on the value of the Shard itself, not the cost of the flat.

So why support a poorly implemented tax? Why not join us and vote for this repeal. This tax can be done much better.
You’re failing to recognise that someone who has, in your terms, seen the value of their investment grow “exponentially” (oh poor them ) have experienced a huge growth in their fortunes. Such people are very lucky to have experienced a huge financial gain that generation-rent could only ever dream of as they throw thousands a month into a black hole. Is that really any different than this tax other than it’s going to some landlord and the person paying it is far poorer? I’m sort of half joking here but I suppose it illustrates something of note.

The main thing to me is that it is okay to expect to pay tax when having experienced such a gain from an investment or just something they got lucky with inheriting for nothing (boo ****ing hoo in that case). Perhaps relating to a personal example, I pay income tax on my RSUs, ditto on the resulting dividends and recognise a capital gain when I sell. I have no qualms about that, I’m better off than most people my age. If I had an exorbitant amount of shares I would not be crying if the government decided to try and tax that wealth. It’s not taking all my gains away, it’s just recognising that those at the top should expect to pay a little bit extra back into the society they have benefitted from. We’re looking at far more long term investments here where those capital gains may not be taxed so often and it is right to consider top-up alternatives purely as a matter of expediency.

I fully accept that an investment, especially property, is not as liquid as income. That doesn’t mean that it doesn’t constitute huge wealth however. This isn’t invisible money as your party seem to be pretending. Gaining hundreds of thousands of pounds in wealth simply for living in a house is still a gain of hundreds of thousands of pounds, whether it’s tied up in property or not. This is a priveleged few rather than John Q Public. None of these people are poor and should be able to find a way to make it work. Otherwise: whatever happened to personal responsibility and living within your means? If you managed to make such huge gains on the housing market whilst simultaneously not planning for a rainy day then I don’t have a great deal of sympathy. However I am saying that because I truly doubt many people in such a beneficial situation would have zero access to capital. This isn’t the same as a situation where far poorer people were being forced out of their homes due to punitive housing benefit changes for instance. Somehow I doubt a libertarian party cared about that though.

However if you were interested in doing this tax better then you would be legislating to improve it rather than straight up abolishing it. You just don’t agree with the concept, and that’s fine, but you may as well embrace that. I would certainly like to see it done differently but I would rather it done slightly wonkily than not at all.
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Rakas21
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Nay.

1) This tax is one which will primarily effect only a small number of primarily London based homeowners at the margin in terms of behavioural outcomes and yet yields significant sums as part of the package which increased spending on capital investment, the nations sovereign wealth fund/automation fund to support small business and even Defense, something the Libers seem not to want to have the funds available for.

2) The second reading of the budget did take into account properties valued at more than 1 million so the notes are quite simply wrong in that regard.

3) The Libers in the notes are deliberately being speculative listing a 3bn cost rather than 8.1bn.

4) The property tax does not come into force until 1st April giving the House plenty of time to approve my additional stipulations in this regard.

5) This repeal as mentioned is unfunded. Bear that in mind when this heads to division.
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Rakas21
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(Original post by Saunders16)
I will wait to see the debate, but I do note that this is a relatively costy repeal.
More costly than the Libertarians suggest. With the House having passed the finance act and Budget it accepted my listed cost (see budget spreadsheet) of 8.1bn.

A vote for this bill is a vote to head back to your constituency and have to explain to them why their roads cannot be maintained, why their rail services remain cramped, why more housing cannot be built, why more austerity is needed. These would be the consequences of voting to create a 8bn black hole in the public finances.

Tell me Saunders, when you visit the people of Essex next, can you in good conscience really tell the homeless people that your party proudly voted to prevent the state having the funds to House them.
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I can also state that the Treasury will consider whether a minimum income threshold is appropriate.
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04MR17
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"average-sized" Isn't defined. Making that example in the notes frankly pointless.


This paragraph also doesn't make sense...
The biggest dodgy assumption used is that all properties taxed are worth £1m, this we know to be false. For instance 3 years ago, during the 2015 general election campaign, the number of properties estimated to be over £2m sat at approximately 100,000, if we assume that all properties worth at least £2m are exactly £2m and there has been no increase in properties worth at least £2m then we have an additional £1bn revenue.
They make the semi-detached their legal address so in the eyes of the law 'nobody is in employment' in the mansion.
If the person who owns the house (regardless of their legal address) is in employment, surely they can be seen as being in employment in that house unless they are a registered landlord and can prove that tenants live there, or some other such arrangement.

You could argue a millionaire in an expensive flat in the Shard pays the tax based on the value of the Shard itself, not the cost of the flat.
This is simply rubbish.





This bill is badly argued, which makes it a no from myself. I agree with the lack of detail in the original rules provided, and perhaps a statement from the government could clarify these, but a complete repeal isn't necessary in my view.
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Mr T 999
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(Original post by Rakas21)
Nay.

1) This tax is one which will primarily effect only a small number of primarily London based homeowners at the margin in terms of behavioural outcomes and yet yields significant sums as part of the package which increased spending on capital investment, the nations sovereign wealth fund/automation fund to support small business and even Defense, something the Libers seem not to want to have the funds available for.

2) The second reading of the budget did take into account properties valued at more than 1 million so the notes are quite simply wrong in that regard.

3) The Libers in the notes are deliberately being speculative listing a 3bn cost rather than 8.1bn.

4) The property tax does not come into force until 1st April giving the House plenty of time to approve my additional stipulations in this regard.

5) This repeal as mentioned is unfunded. Bear that in mind when this heads to division.
You say it will effect a small minority assuming everyone who owns a house valued at 1m are millionaires which is false. There are many people who will suffer house price inflation who got lucky with their property investment the lower middle class. This effects them the most, potentially pushing them out of their property.

There's 300k properties at £1m plus so that's £3bn and the figure Includes unemployment and avoidance which offsets increased prices. Which your figure fails to take into account. Even then the 3bn figure is still massively over stated if you take into account the loophole that the wealthy can use by choosing their primary residence they can completely avoid paying the tax. So it fails to rasie adequate funds to fund the things you want.
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Mr T 999
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(Original post by Rakas21)
More costly than the Libertarians suggest. With the House having passed the finance act and Budget it accepted my listed cost (see budget spreadsheet) of 8.1bn.

A vote for this bill is a vote to head back to your constituency and have to explain to them why their roads cannot be maintained, why their rail services remain cramped, why more housing cannot be built, why more austerity is needed. These would be the consequences of voting to create a 8bn black hole in the public finances.

Tell me Saunders, when you visit the people of Essex next, can you in good conscience really tell the homeless people that your party proudly voted to prevent the state having the funds to House them.
"more costly" its actually least costly for the reasons I have stated above. Don't forget you made a blunder when calculating the income tax changes, so we can't exactly say your figures are accurate.

The roads and rail services will be maintained regardless and will not suffer becasue of this. This will not create a 8bn or even a 3bn black hole. Given how poorly defined things are in the budget and the obvious loophole that exist which I have already explained. The costing are massively overblown. The damages you are claiming that will be done won't happen.
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Rakas21
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(Original post by mr T 999)
You say it will effect a small minority assuming everyone who owns a house valued at 1m are millionaires which is false. There are many people who will suffer house price inflation who got lucky with their property investment the lower middle class. This effects them the most, potentially pushing them of their property.

There's 300k properties at £1m plus so that's £3bn and the figure Includes unemployment and avoidance which offsets increased prices. Which your figure fails to take into account. Even then the 3bn figure is still massively over stated if you take into account the loophole that the wealthy can use by choosing their primary residence they can completely avoid paying the tax. So it fails to rasie adequate funds to fund the things you want.
I can't copy the link from my phone but my budget spreadsheet outlines the costing and working and that there are likely 870,000 properties rather than 300,000. It also takes into account properties at more than a million.

And the wonderful thing is i used Jammy's own source for that.

The bill was always to be followed by another claryfying aspects of it. It had to go in the finance bill because Mr E/Jacob was particulaly energised and i knew our parliamentry leverage was greater at the end of last term.
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Mr T 999
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(Original post by 04MR17)
"average-sized" Isn't defined. Making that example in the notes frankly pointless.


This paragraph also doesn't make sense...


If the person who owns the house (regardless of their legal address) is in employment, surely they can be seen as being in employment in that house unless they are a registered landlord and can prove that tenants live there, or some other such arrangement.
Nope. Under current laws for capital gains tax purposes if a individual owns more than one property they can choose which is their main residence. For example a wealthy person that owns a £1m mansion and semi-detached house can declare their primary residence at the semi-detached house and technically nobody will be employed at the mansion and thus avoid paying the tax. This was done my MPs 10 years ago now in a scandal.

(Original post by 04MR17)
This is simply rubbish.
Because nothing is defined and everything is poorly worded and vague it's left open for interpretations. There's nothing that mentions the size of the area or defines what a property is. You could make that argument.



(Original post by 04MR17)
This bill is badly argued, which makes it a no from myself. I agree with the lack of detail in the original rules provided, and perhaps a statement from the government could clarify these, but a complete repeal isn't necessary in my view.
A repeal is necessary it's a poorly defined and implemented law that fails to achieve anything. The figure is massively overblown and won't even raise the funds it claims becasue of the loophole. Its best to repeal and write a better version.
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