A regressive tax is one where a poorer person would pay a higher proportion of their income than a richer one. For council tax, you pay more if you live in a more valuable house. I'll accept that there won't be an exact correlation between income and size of house, but I'm not sure how this works out as a regressive tax. Poll tax was regressive. Council tax would seem to me to at least be attempting to be proportional.
Of course a libertarian like me would argue that council tax is simply a way of paying for a certain level of services provided by your local council. And as poorer people may well use more of those services, I would argue that if they pay less tax and get more services in return (for example, looking at the Caradon District Council leaflet in front of me, 'community services', 'adult social care' and 'children, young people and families), then council tax in real terms is actually progressive.
Our council tax bill this year was a bit over £1,500 (and after the regrading of housing in the near future, I fear it will shoot up as I can't imagine that our house should really count as band E). In return for that, we get police (fair enough - although you almost never see a policeman in the village) and rubbish collection.
There is a long list of people who are unfairly hit by this tax, which we can all think of eg. pensioners, those who live alone, those who bought their homes a long time ago or inherited them and/or have seen them surge in value by doing nothing themselves (say, the area becomes up and coming).
The fact is, people don't just choose exactly what size of house to live in/buy and where, there are so many other factors that come into it. A lot of people find themselves having to buy/rent a house they can barely afford because that's all there is, or the travel to work would otherwise be prohibitive, or it's near the relatives they care for, etc. Then to get the double whammy of being charged more council tax on top of this is just ridiculous.
I quite liked the idea of "local income tax".
I agree it's not an entirely regressive tax (although how many exceptions to that rule does one need before it de facto IS one?) but it's certainly nowhere near a reasonable one.
I'm not convinced by the argument that it's "unfair" that pensioners, people who live alone etc are hit hard by council tax increases. There's a real housing problem in this country, and at least part of it is due to the ageing population and the fact that there are a lot of elderly widows rattling around in 4-bed houses while young families can't afford to get on the property ladder. Sad as it is for the individuals, it seems to me it may be a good idea to apply a bit of pressure to such people to downsize, and free up the resources.
That argument's all very well if they can afford to downsize (moving costs), and if there is somewhere for them to downsize to. Moving costs are higher if you are older, cos chances are you can't easily carry boxes and that sort of thing.
There are plenty of retired people who have already moved out of their family homes into much smaller accommodation: they are still being squeezed by council tax on their fixed incomes (because they didn't have their money in property, it hasn't grown as fast as property prices have done).
Short of moving to an inner city terrace totally inappropriate for aging residents (steps, stairs, steep walks to the shops etc) there is nowhere really left for them to go.
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no subject
Date: 2007-03-22 02:57 pm (UTC)Of course a libertarian like me would argue that council tax is simply a way of paying for a certain level of services provided by your local council. And as poorer people may well use more of those services, I would argue that if they pay less tax and get more services in return (for example, looking at the Caradon District Council leaflet in front of me, 'community services', 'adult social care' and 'children, young people and families), then council tax in real terms is actually progressive.
Our council tax bill this year was a bit over £1,500 (and after the regrading of housing in the near future, I fear it will shoot up as I can't imagine that our house should really count as band E). In return for that, we get police (fair enough - although you almost never see a policeman in the village) and rubbish collection.
no subject
Date: 2007-03-22 03:03 pm (UTC)no subject
Date: 2007-03-22 04:53 pm (UTC)The fact is, people don't just choose exactly what size of house to live in/buy and where, there are so many other factors that come into it. A lot of people find themselves having to buy/rent a house they can barely afford because that's all there is, or the travel to work would otherwise be prohibitive, or it's near the relatives they care for, etc. Then to get the double whammy of being charged more council tax on top of this is just ridiculous.
I quite liked the idea of "local income tax".
I agree it's not an entirely regressive tax (although how many exceptions to that rule does one need before it de facto IS one?) but it's certainly nowhere near a reasonable one.
no subject
Date: 2007-03-22 08:23 pm (UTC)Neuromancer
no subject
Date: 2007-03-23 01:59 pm (UTC)There are plenty of retired people who have already moved out of their family homes into much smaller accommodation: they are still being squeezed by council tax on their fixed incomes (because they didn't have their money in property, it hasn't grown as fast as property prices have done).
Short of moving to an inner city terrace totally inappropriate for aging residents (steps, stairs, steep walks to the shops etc) there is nowhere really left for them to go.
no subject
Date: 2007-03-24 01:09 am (UTC)no subject
Date: 2007-03-24 01:11 am (UTC)(OMG - I can't believe I agree with the 'Lib'Dems on something.)