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Today is Council Tax Bombshell Day (and it's no April Fool)

April 1st 2005 is the date at which every property in England is to be revalued. This is to enable a Council Tax rebanding.

This sounds relatively anodyne given that in theory it is a "nil sum" operation. However, the experience from Wales is that there have been increases in the amount of tax people have to pay of up to 22% on top of inflation.

The only fair option is to "Axe the Tax" and replace the Council Tax with an Income Levy paid with Income Tax (A Local Income Tax).

This would be administered by the Inland Revenue and collected together with the normal income tax bill. It would, therefore, be very cost effective to collect.

Most importantly it would be fair, being based upon people's ability to pay.

Comments

PoliticalHack said…
...and it hands all the power in funding local government to Whitehall, as they will decide how every penny of that tax is redistributed to balance the rich and poor areas.

The LibDems have made a big point that a lot of their (elderly) voters would be better off, but there are an awful lot of people who will find themselves worse off as a result.
john said…
That is not the case as you can vary the local rate.
PoliticalHack said…
Of course it is true. Unless you want to cut the overall amount generated by the tax system, if one group pays less, someone has to pay more to make up the difference. This difference kicks in at a very low level.

The tax has major problems, which haven't been discussed.

Where will you pay tax - where you live or where you work? What's to stop somebody claiming to live in a cheaper area than they actually do - using their parents' address for all Inland Revenue information? This has the potential to adversely affect local democracy (an issue dear to your heart) in the same way as the poll tax.

This is another of those LibDem policies that creates a good soundbite to conceal the nasty bite.
john said…
My response was to your allegation that it "hands all the power in funding ... to Whitehall"

Obviously for some to win, some have to lose. People on lower incomes win, those on higher incomes lose.

Simple really.

It feeds into how you wish to structure society and the nature of the taxation system.

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