Council Tax.......

[Loosehead]

has been in the news a lot recently and a number of people are actually starting to say that it's predecessor, the community charge was actually fairer, I have always thought this but up to now it has been largely hated, what do abers think? where we too hasty condemming the CC? I mean what was so bad about it? I like the idea of paying by the person regardless living arrangements what was so wrong with that? Are we now as a populace thinking that the CC wasn't too bad after all?

[jake-the-peg]

It took no account of the ability to pay.

There is a long history of taxes in this country either directly (income tax) or indirectly (VAT) being related to ability to pay.

That's why there's so much fuss when attempts are made to VAT is imposed on necessities like heating fuel.

And No "We as a populace" are NOT thinking the poll tax ...er sorry Community Charge wasn't too bad after all. 

[luckyboy]

jake is right. the built in unfairness of the poll tax ie the ability to pay makes The council tax the lesser of two evils...

Well lets face it nobody likes paying tax do they..

God knows how much the poll tax would have been by now...more than the present council tax i would think.

[Loosehead]

But the council tax is not based on ability to pay either, I mean you've got pensioners living in large houses but with small income and they are expected to pay ever more extortionate amounts. At least it's predecessor had an amount per person regarldess of what house you live in. I agree that the ability to pay should be accounted for and I do support the local income tax idea.

[Ding-Dong]

Agreed Loosehead - I've always thought the poll tax was a better system than council tax.

Have never quite understood why people think it is fair that a household that has, say, four earning adults should pay exactly the same as the old couple next door trying to eke out their meagre state pensions.

Under the poll tax the four earning adults would pay more.

This is much fairer - isn't it?  

[Loosehead]

I think we are as one on this Ding dong!

[jake-the-peg]

It really all depends on what you think of as fair.

As I said historically some element of ability to pay has always been seen as an important component to "fair".

The "property rich, cash poor" syndrome is a significant wekness in the council tax and local income tax would be much fairer in this regard.

Unfortunately the Lib Dem's model made more people poorer off when you ran the maths and so getting it implemented would have been tough.

There's a rather interesting approach being promoted in the States calling itself the "fair tax" basically a global 30% VAT rate and the abolition of all other taxes

http://www.fairtax.org/

Don't think anybody'll go for it though most countries are rather conservative about their National revenue raising methods the consequences of it all screwing up are just too horible to contemplate

[nodumbblonde]

I bet that the only people who think that the poll tax is fairer are the people who live on their lonesome.

[Ding-Dong]

Well that's a bet you've just lost then.

[Gef]

Different name - same thing.

[bernardo]

Aha!  I'm glad you asked about the Community Charge a.k.a. Poll Tax, because it gives me another opportunity to mention PR.

When the Conservative government started introducing the CC/PT in the late 1980s, the original plan was that it would

• be phased in over ten years
• have a safety-net for those who were hit hardest
• replace the rating system gradually.

But at successive party conferences, the rank-and-file members of the Conservative Party were jumping up and down with excitement at the idea so much that the government was persuaded to

• abolish the safety net after the first year
• reduce the phasing-in period from ten years to four
• abolish the phasing-in period completely, and introduce the CC/PT in on swell foop.

The results were that

• It was introduced suddenly, with a big impact on many people who found themselves paying a whole lot more
• general public perception that it was unfair
• millions of people refused to pay - i.e. enough to make it unworkable.

The reason why I mentioned Proportional Representation is because the government in 1988/89 was misled by the large size of its parliamentary majority, and came to persuade itself that the plans for introducing the CC/PT were more popular than they actually were.  If the government had not had such a large parliamentary majority (i.e. if it had had only a small majority, or if it had been in a coalition with (e.g.) the SDP) then it would have been more careful and would have been far more likely to stick with the original plan for phasing-in with safeguards.  Therefore I think that the CC/PT would probably have come to be in place with a much higher level of public support, and would have settled in as a viable long-term system.

[bernardo]

(continued)

People who support First-Past-The-Post sometimes say that the system was flexible enough to allow for the CC/PT to be introduced and replaced within the lifetime of a parliament.  But the point is that under PR, it would have been unlikely to become such a crisis in the first place.

But another problem with the old rates and the CC/PT and the current Council Tax system is that the actual amount of money being paid has been creeping upwards and becoming more uncomfortable for people generally.  The real problem is the balance between local government and central government, both in terms of responsibilities and expenditure.  Local government is being made to do so much stuff, and with very little margin for variation, on behalf of central government.  The basic problem is more than just the funding system.

Anyway, all three systems do not take enough account of ability to pay.  On balance, I think that Local Income Tax would probably be the most viable and enforceable system in the long term - it could be done with the existing collection mechanism, and would be seen to be fairer.

[Loosehead]

Thanks for that Bernardo I agree with your local funding bits entirely, and I applaud your tenicity in connecting it with PR! Anyway the original point was that: do you think the CC, initailly hated, was in fact worse than the CT. I think the latter is worse for it's indescriminate assumtion that large house = wealthy. I take your points about the CC and I'm sure the governement should have been able to implement it better but I think, in the absence income related funding, the next best thing is that one person pays for one person's share of local expenditure. Why was that percieved as so wrong at the time, apart from the "ability to pay" argument?

[bernardo]

The "ability to pay" argument is actually a huge part of it.  On balance, I probably prefer the Council Tax because there is a very vague and approximate and haphazard relationship between large house and wealthy.  Who lives in slums and squats and small flats?  Poor peasants and chavs and scum.  Who lives in big posh houses?  Rich posh people.  Not entirely, but generally.  The CC/Poll Tax however did not take income into account in any way, even indirectly.

I think that local taxes have tended to be levied on households rather than individuals mainly because houses are fixed and can't hide, whereas people can move around and disappear.  It is physically easier for people to avoid paying a poll tax than the council tax.