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

1. 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.

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For those studying Economics A-Level at the moment, you will probably not remember the poll tax. This tax introduced by Mrs Thatcher was probably one of the most unpopular taxes ever introduced. It was widely condemned as being unfair and inequitable. The principle of the council tax was that everyone would pay the same. Whether you were wealthy or low paid, you received the same council services so. Therefore, the argument went, you should pay the same amount. The problem was that if the poll tax was £500, it could be a high % of a wasn’t willing workers disposable income. Another problem with the poll tax was that the amount could vary widely from one borough to another. Some rich boroughs were able to charge very low poll tax; others charged a very high %.

After a long campaign, including the infamous poll tax riots in London, Mrs Thatcher responded to the criticism by offering a rebate, to reduce the cost of the poll tax. But, she wasn’t  willing to compromise on the principle that everyone pay the same amount.

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Ireland has introduced an interesting law, which has placed a 15 cent tax on the plastic bag. Combined with an advertising campaign to make the plastic bag unacceptable, use has fallen between 90-94%. Within a few weeks, there was a visual improvement in the number of plastic bags littering the environment. Other countries such as Bangladesh and China have gone further and banned the plastic bag.
Due to its relative success, many are suggesting we should implement this policy in the UK. These are some of the economic, social and environmental arguments in favour of banning the plastic bag.

Advantages of Plastic Tax

1. Reduces costs to shops. Usually, shops are reluctant to charge for plastic bags. But, if they have to charge, people will be increasingly likely to use alternatives and reuse old bags.
2. Reduces Litter. Around Oxford, I see a real problem with litter, 50% of which seems to be plastic bags. They get blown into hedgerows and get stuck for years, causing visual blight to the environment. If plastic bag use was discouraged the amount of litter would significantly be reduced.
3. Plastic Bags not Biodegradeable. Plastic bags take 1000s of years to disintegrate, therefore our landfills are full of plastic bags which don’t breakdown
4. Bad for Wildlife. Because plastic bags can float around they can often cause problems for wildlife.
5. Reduce dependence on oil-based products. Because plastic bags are made from the oil they increase our dependence on oil imports. With rising prices of oil, there is an increased desire to avoid oil products where necessary.
6. Aesthetically pleasing. For those who yearn for the good old days of high street shopping in paper bags, before the advent of the out of town supermarket, banning the plastic bag would encourage people to go back to the basics of shopping.
7. Tax Raises Revenue. An estimated 10 million Euros
8. Tax makes people pay the social cost. Using plastic bags creates negative externalities, a tax will make people pay the social cost. At the moment, plastic bags are usually free and therefore, firms subsidise the use of goods with negative externalities.

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