lib dems: we will scrap council tax

[MovedGoalPosts]

Originally Posted by Graham

<snip>Not in the slightest! There are "fashionable areas" (even in a small city like Portsmouth) where house prices have gone through the roof whilst only a few miles away the rate of increase has been much less.

If you've been living in one of those areas since before when house prices were assessed, you could be faced with a massive rise in tax through no fault of your own.

Yep prices can change disproportionately between neighbourhoods. Over time this does affect the accuracy of bandings. The biggest problem though is that bandings are based on a moment in time, so far back, that few can make any comparison with current reality. Thus there is perceived unfairness, even though there might still be a level of parity.

Business properties are revalued at five yearly intervals. The same should have been applied to housing. But no doubt the cost of such regular revaluations would be so administratively burdensome that the costs of council tax would escalate yet again.

*Wonders why noone complains about water rates to the same degree as council tax, yet these to are based on historic property values. Maybe it's because water bills are regulated, and can't increase too much relative to inflation. Wonders why the same regulation constraints to prevent vast increases aren't applied to council tax.

Originally Posted by MovedGoalPosts

Yep prices can change disproportionately between neighbourhoods. Over time this does affect the accuracy of bandings. The biggest problem though is that bandings are based on a moment in time, so far back, that few can make any comparison with current reality.

True, but...

Business properties are revalued at five yearly intervals. The same should have been applied to housing. But no doubt the cost of such regular revaluations would be so administratively burdensome that the costs of council tax would escalate yet again.

... however even five years may be too long. I bought this flat for £57,500 about 2 1/2 years ago. Were I to sell it now it would be worth around £90,000 .

In some parts of Portsmouth prices have appreciated even more in that time.

*Wonders why noone complains about water rates to the same degree as council tax, yet these to are based on historic property values.

Because it's not a political issue? Anyway, if people are concerned about their water rates, they can consider going onto a meter system if they have low usage.

Maybe it's because water bills are regulated, and can't increase too much relative to inflation. Wonders why the same regulation constraints to prevent vast increases aren't applied to council tax.

Well there are supposed to be caps on council tax rises, but since it's a political issue, they're not so easy to deal with.

[MovedGoalPosts]

Originally Posted by Graham

Because it's not a political issue? Anyway, if people are concerned about their water rates, they can consider going onto a meter system if they have low usage.

Ah the crux of the matter. For those who would see a saving in their taxation, they will be happy to move to the cheaper option. For those who will incur more cost, there is no incentive to move, and indeed there would be opposition.

So for a local income tax scheme, would there be sufficiently more gainers than loosers to enable the Lib Dems to get away with the change or turn it into a hot potatoe. Would the loosers be sufficiently many and aggrieved to create enough noise that the policy would become unworkable, much like the Poll Tax?

[Pierre]

It's a difficult issue, but the current system has to change. At the moment we are seeing people who have worked hard all their lives to pay off their mortgage and hopefully have enough money in their pension for retirement - being forced to sell the homes they worked so hard for because they cannot pay the council tax.

So the pensioner in a nice house they have earned has to pay the same amount as the family of 15 in a council estate that probably haven't worked a day in their lives and who probably get their council tax paid for in benefits anyway.

The poll tax at the other end of the spectrum was nearly a good idea but this benefitted the rich people who lived in mansions and earned millions but paid the same as a single parent on an estate.

what is required is a blend of the two, based on the income of the property and the value of the property. Also IMO pensioners should be exempt (or at least those that have paid their tax's all their lives)

What is the point of trying to make a better life for yourself so that when you retire you can't afford to live in your house, and if you sell it or pass it onto your kids bloody Brown is there to take his cut.

Originally Posted by MovedGoalPosts

for a local income tax scheme, would there be sufficiently more gainers than loosers to enable the Lib Dems to get away with the change or turn it into a hot potatoe. Would the loosers be sufficiently many and aggrieved to create enough noise that the policy would become unworkable, much like the Poll Tax?

IMO there could be more gainers than losers (although that does, of course, depend on the level the tax is set at) because there are a lot of pensioners and low income families who will see this as a benefit to them.

The question then becomes what the charge will be for "middle England" families, ie those who are above the benefit levels, but not "big earners" and whether they will see a reduction in their tax bills from Gordon's Stealth Taxes.

[BBKing]

Problem with local income tax as I see it is the cost of the bureaucracy, as there are more people than houses in the country.

Other than that it sounds a fine idea - income tax is the only fair tax anyway. Answering Pierre's point about hard-working pensioners, many pensioners earn nothing like as much as even a low-paid worker, so would presumably be exempt (assuming an allowance below which LIT wouldn't operate, mainly because the cost of collecting it wouldn't be worth it) or pay very little.

BB (third highest council tax in the country going up 5.6% this year ouch and a Tory council too)