The dreaded Council Tax

Biggles

Big improvement to council pensions

Most people's pensions are going the other way.
This won't help keep council tax down

I think 'Big improvement to council pensions' must have been your own headline, it certainly wasn't suggested in the news item you linked it to.

It looks as though, even though the accrual rate does increase from 1/80 to 1/60, there are enough other significant, unfavourable changes to enable the overall cost to the council of the revised scheme to be reduced.
http://www.communities.gov.uk/index.asp?id=1504539

Suffice it to say that Unison appear to be spitting feathers over the unnegotiated imposition of the new arrangements and are talking about more strike action (though what's new?).

jennifernil

Margaret, I doubt you will find anyone who would not want to pay less Council Tax! I think what you pay should be related to your ability to pay, not to what your home may be worth.
Having contributed to a pension for many years my husband will have a decent pension, so a local tax on that would probably still be a fair amount.
When/if we start running out of money we will sell the house and move somewhere smaller, so we will not be a financial burden to anyone.
We could even live in our caravan!

margaretclare

jennifernil wrote:

Margaret, I doubt you will find anyone who would not want to pay less Council Tax!

Agreed. I would prefer to pay the £65 which used to be the rate 2 or 3 years ago, or the £38 that it used to be, rather than the £99 a month that it is now.

Even more, I would prefer that this money isn't wasted on e.g. regional assemblies. I would prefer that my council, with all others, isn't told to build what amounts to another 'new town' for 3,000 people in the green belt, all because our borders have become so porous and the country's population increased by half-a-million immigrants last year. I would prefer to keep our green spaces, places for wildlife and recreation, as long as possible.

I think what you pay should be related to your ability to pay, not to what your home may be worth.

But that would imply more means-testing, which isn't popular. And just where do you start to draw the lines?

I agree with others that the much-hated 'poll-tax' seemed to be fairer. At present there's a 25% reduction if you live alone, but a house doesn't cost a quarter less if there's only one person in it. In fact, it costs just about the same to heat, to maintain, to insure etc. It would be much fairer if each individual adult paid equally.

Margaret

Mrs_pbradley936

In Florida the property tax is 1.5% (similar to Council tax in that it pays for local services) of the value of the home. The owner of the property is responsible for the payment. If it is your only home you can apply for a “homestead” and get a discount along with an assurance that your bills will never be increased above a certain percentage. In practice this means that if you have a holiday home, or a super place on the beach less well off people are not subsidising you. Under our system if the top rate band relates to houses worth £360K and above quite ordinary people are paying the same Council Tax as high earning footballers, city workers and pop stars in their £million plus homes.

Also something I really like about the Florida system is that every year they send you a notice which says where the money is being spent AND THEY HAVE A PUBLIC MEETING TO SEE IF THIS MEETS WITH TAX PAYERS APPROVAL! Not just one meeting, they will give you the date and time about say the proposed libraries expenditure and if you feel strongly one way or another you turn up and influence the vote for it.

Mike_S_8

seven-day-weekend wrote:

Would you rather the 2/3 of unpaid CT (if it was done the way you wanted it) was written off? That would be worse for everybody.

No. What this shows up is just one of the failings of the existing CT system. I think that the current system for CT should be scrapped and an income-based charge for local services (call it a Local Amenities Supplement, for example) should be collected using the existing Revenue and Customs system and that such a charge should be listed on pay-slips, P60s, etc., in the same way that Income Tax, NI and other deductions are listed.

Gas bills (and the like) are a whole other topic for discussion.

Mike_S_8

margaretclare wrote:

But that would imply more means-testing, which isn't popular. And just where do you start to draw the lines?

As I've mentioned before - and since we have to pay taxes - the fairest means test currently available is the Income Tax return - even though it's taken a severe knock because of Gay (in the Scottish dance sense, of course) Gordon's abolition of the married couples allowance; MIRAS, etc.

ManAtHome

Yes, but in place of the married couples' and MIRAS deductions, we have working tax credits and child tax credits, neither of which I believe are subject to tax (?) as well as the plethora of other benefits. These certainly distort "ability to pay" based purely on taxable income.

We already have problems with pension top-ups - if you save and get an extra annuity, if this returns less than about £30 a week (possibly around a £30k pension pot?) you may as well have spent it...

Another problem is if you have split your savings between property, pension, cash etc instead of putting it all into property. You will probably be less "well off" overall, but have fewer "nil return" assets so will have a greater ability to pax tax!

lodestoneman

Mike_S wrote:

I think that the current system for CT should be scrapped and an income-based charge for local services (call it a Local Amenities Supplement, for example) should be collected using the existing Revenue and Customs system

Exactly Mike. Why do we need to have taxes collected locally when three quarters of local funding comes from income tax anyway? Why not let the Revenue collect it all at a fraction of the present cost?

Mike_S_8

ManAtHome wrote:

Yes, but in place of the married couples' and MIRAS deductions, we have working tax credits and child tax credits, neither of which I believe are subject to tax (?) as well as the plethora of other benefits. These certainly distort "ability to pay" based purely on taxable income.

OK. What would be your solution? Or, are you happy with the existing system - bearing in mind the compounding effect of what now seems to be becoming the norm - an annual 5% increase?

ManAtHome

Happy enough with the current system of collection - has been roughly in place for many many years and has already been stated is an almost reasonable mix of income and asset taxation (apart from the cap/compression at the top end).

I don't belive the forever above-inflation (however you measure it) increases are a direct result of the collection method. The solution if anything is to make more people taxable - maybe then they will get off their backsides and actually vote in local elections. LAs have had a fairly free run for a long time with empire-building and pet projects - unlike most businesses, they have captive customers, so can simply bang the price up. Moving the liability to somebody else isn't going to cure that.

As an aside - would you trade the planned pensions reform (increase in basic and link to wages) for transferring CT to income tax? I ask as I can forsee major problems in the years to come - the UK has enormous and growing liabilities which have to paid for at some time. There will be a greater ratio of pensioners to non-pensioners than we've ever had, and a lot of them will be wealthier (at least on paper) than many higher-rate taxpayers. I think there may be a redefinition of "fair" at some point...