The argument was that the poll tax was so bad that anything had to be an improvement. So with little thought, the Conservative government brought out the Council Tax. The council tax aims to introduce a degree of proportionality and fairness by charging a tax equal to the value of a house. The argument is that people who are wealthy have a high house value and therefore can afford to pay more.
However, this policy has been widely criticised. These are some of the criticisms of the Council Tax
Problems of the Council Tax
- Wealth is not the Same as Income. Just because your house is worth £200,000 doesn’t mean you have a high income. For example, a pensioner may own their own house, but, their pension may give a very meagre income. People living in the same valued house can have widely varying incomes and therefore ability to pay.
- Many First time buyers have high mortgage payments. To buy a house for £200,000 means that a new homeowner would have to pay very high mortgage payments of over £1,000 a month. Council tax on top of this can leave very little disposable income.
- The problem has been exacerbated by constant increases in council taxes. Councils have been unwilling or unable to control spending meaning that many people face rising bills. The average council tax Band D is now close to £1,374. When Labour came to power in 1997, the average bill was £688. This increase is far above the inflation rate. It means any unfairness in the system is magnified.
- Banding is often arbitrary and reflects local housing market, rather than the affluence of the homeowners.
Alternatives to Council Tax
Local Income Tax. This is what I want. Local income tax will be fair.
Local Councils could spend Less. God alone know what my local council spends their money on.