MSE News: Charity calls for council tax reform

mr_jrt

bigjeeze wrote: »

But you still don't afddress the issue that I have which is that my proporty has gone up in value but my income has gone down - in your eyes i should have to sell my proporty to pay the council tax!! If thst isn't regressive I don't know what is. Whatever way you cut it we should all pay a fair amount not based on income or worth but on necessity.

Please don't put words in my mouth or assume what I believe. I never stated the position you attribute to me. In fact, my position is in fact opposite to that!

A local income tax makes the value of your home irrelevant. You pay a percentage of your earnings. Less earnings - less tax.

LVT is based upon the value of the land on which your home is built - not the building itself. Build an extension and the tax remains the same - the land has not changed. Have a new metro system station built nearby and the tax would go up as the value of the land has now increased, and the government should probably be able to recoup the cost of infrastructure from those that benefit from it though the value of the land on which their home sits rising (obviously simplified, the value of your home is the sum of the value of the building and the value of the land on which it sits).

Randvegeta

In some ways, it seems reasonable to tax based on the value of the land/property given the higher the value, the wealthier you are. This actually true regardless of your income, given you have the option to sell!

If you don't complain about road tax, then this should be no issue at all. Where road tax hits hardest those who use those who use their car least, we can safely say that people pretty much use their homes equally. A tax on property makes far more sense than road tax.

Like with road tax, if you feel it is too expensive, get rid of it and by yourself a cheaper car. The benefit of homes is you will likely sell your home for a substantial amount and replacing it with a cheaper alternative, allowing you to pocket the difference.

I don't think this is entirely fair, but it is more fair than adding another income tax. Living where you live is largely a choice, and if you choose to live there, then you are choosing to pay higher taxes. You can't have your cake AND eat it... unless your'e a student... or perhaps receiving benefits :P.

My personal view of what is fair and not fair would seem 'favourable' to the rich and less so to the poor. Higher taxes on higher valued property is the opposite. It's intention is to tax the richer. After all, let us take the following scenario.

Person A is making 20k /yr and purchased a house for 100k in 2000 in location 1.

Person B is making 20k /yr and purchased a house for 100k in 2000 in location 2. Just a few miles from location 1.

Now, in 2012, person A and person B are still making 20k each and their properties are worth 150k and 500k respectively.

Because of the rise in property value, person B now pays much more in tax than person A.

Which person do you rather be? The one with only a 50% gain in value? Or the one with 400% gain in value? Would you rather live in the 150k and pay less tax, or would you rather live in your 'up market' 500k place?

If the answer is 150k, then you'd be an idiot. If money is an issue living in the 500k place, you SHOULD sell, move to location 1, pocket the 350k and pay less tax. You'de be doing much better than person A!