Council Tax Model - why based on House Valuation?

amarcusj69

Understand. And back to my Q .. these are all ‘counts of people’ matters. So if we are all asked to contribute proportionately then why does a 2 occupant £400k house have to pay more than a 2 occupant £200k house? 

amarcusj69

@Van_girl - here is a link to the 2019 report and proposal for Wales. it is some 2 years old now and who knows if it is still to go through. But it answers your “25%” discount question. 

NB: as I’m still new here I can’t post links - so to open the file below you’ll need to add 

https// before the ifs.org part to complete the link. Sorry - just trying to get you to the file. 

ifs.org.uk/uploads/R169-Revaluation-and-reform-of-council-tax-in-Wales-2.pdf

Grumpy_chap

amarcusj69 said:

Understand. And back to my Q .. these are all ‘counts of people’ matters. So if we are all asked to contribute proportionately then why does a 2 occupant £400k house have to pay more than a 2 occupant £200k house? 

That seems to be suggesting that the Council Tax (or any alternative means of localised taxation for LA funding) should be solely per capita based.

That is different to the original question:

amarcusj69 said:

Surely the singular model of “house valuation alone” is flawed and there should be the extra dimension of “occupancy”? 

amarcusj69 said:

My question remains - why are there no models being proposed that account for both property value AND occupancy (either potential or actual)?

Localised LA funding used to be rates - solely property based
Then it changed to Community Charge / Poll Tax - solely per capita based
Now we have Council Tax - mostly property based with some consideration for occupancy added in.  Council Tax is the closest system we have to the one you seem to seek.

As for the 2 occupant in £400k house paying more than 2 occupants in £200k house, that diversion in payment would, in overall consideration, be a progressive taxation / redistribution on the basis that the 2 occupants in the £400k house are more financially well off than the two occupants in the £200k house.  There is a lot of detail in this as to whether the 2 occupants in the more expensive house really are more financially well off, but that is the logic behind it.

amarcusj69

So we’ve come from a system that said “how many” to one that says “how much” - my question is “could we not have a meaningful hybrid of both”? 

People earning more pay more Tax / NI anyway, so why do they also have to pay more on top again - and disproportionately so - for services everyone uses? 

An interesting discussion and thanks to all for their replies / views etc. I’m just trying to square my head around what passes the common sense test. I accept this is not easy, but in a world where there is so much readily accessible and detailed information about each household … surely it is time to have a more robust model that asks each person to contribute more fairly and not just because they live on the wrong side of the street. 

lincroft1710

Exodi said:

lincroft1710 said:

I forgot to mention earlier, but Council Tax is not a payment for services, it is a tax which goes towards funding local government spending

I think this is probably not so black and white, council tax bills are made up of provisions which in part include social services, as well as fire & rescue, and police & cc services.

True, but in the past a lot of people have complained about paying CT and not receiving services such as street lighting, made up roads, waste collection etc, so it was always pointed out that CT was not a payment for council provided services.

Grumpy_chap

amarcusj69 said:

So we’ve come from a system that said “how many” to one that says “how much” - my question is “could we not have a meaningful hybrid of both”? 

To directly answer your question, we do.  The current system of Council Tax really is the closest we have ever had to the hybrid you desire.

To correct your history, we did not really come from a system that said "how many" to one that says "how much" as the starting point before "how many" was "how much" and the "how many" system was really very short-lived and bought about the downfall of the Government.

elsien

Poll tax riots. The start of Thatcher’s downfall. 
Can’t see a government wanting to revisit that any time soon, 

lincroft1710

As I pointed out in my first post, the domestic rates system was based on property values and that dates back over 100 years. The only time the system changed to a tax based on adult occupiers of a property was the Community Charge which lasted from 1990 to 1993, all of 3 years!

amarcusj69

The 2019 report for Wales is looking at a revaluation exercise and a new model (which - as noted earlier - would remove the 25% single-person discount). 

Houses prices have increased sig. and I agree the bandings from 2003 are out of date (1991 in England!). However, certain house types have increased at a greater rate than others because they are fewer - linked directly to how house builders have a) chosen to build more smaller properties to maximise the profit on a piece of land, and b) the need to have more houses in the first place to allow FTB-ers to get on the ladder. The Welsh model is going to ignore this and seek to set the bands at levels where houses that were in say E today would jump to H tomorrow, with an increase of c.30% on the current CT bill. At the same time those smaller properties would drop by 30%. Yet the occupancy percentages since 2003 are pretty much the same! 

Surely this does not pass the common sense test? 

Grumpy_chap

amarcusj69 said:

Surely this does not pass the common sense test? 

Since when has it been the requirement of taxation to pass the common sense test?