council tax consultation

(87 Posts)
buggyRunner Tue 04-Sep-12 15:59:54

we've just had a questionnaire through about council tax.

basically saying do you want to cut council tax benefits and keep tax your paying the same or do you want a 1.7% increase and keep everything the same for people on discounts.

I don't want an increase, it would mean we have to pay more than the 2.5k were already paying which will mean sacrifices.

aibu?

niceguy2 Tue 04-Sep-12 16:21:54

Well firstly this isn't AIBU so YABU to ask.

That said I guess the council's intention is to see what their constituents think which is fair enough but I'm a bit hmm about the questionnaire and who it goes to.

The problem with council tax is only a minority of people are responsible for paying it whilst every adult can vote. So what you will end up finding is many people will vote for the increase because it doesn't affect them.

buggyRunner Tue 04-Sep-12 16:38:55

it was worded as if to absolve them of any responsibility for cuts. really made me angry- just hope the tax doesn't go up

CogitoErgoSometimes Tue 04-Sep-12 16:43:46

It's not absolving them from responsibility, it's canvassing opinion referendum style. Your opinion is that they should cut council tax benefit so that you and others don't have to pay more. Other people may be happy to pay a bit extra so that those on benefits don't have to. Isn't that sort of how local democracy is supposed to work?

alemci Tue 04-Sep-12 16:49:31

why should you have to pay anymore - 2.5K is alot of money. it does sound like emotional blackmail.

also some of the people getting discounts may not necessarily be on benefits but to me it has always seemed like some people are subsidising others who could make more of a contribution but don't.

dreamingofsun Tue 04-Sep-12 19:41:25

we've been asked the same in previous years. like you i think paying over 2.5k is a bit much. we've looked into discounts for a club i run and came to the conclusion that almost any group of people claim they should get them - currently its OAP's who obviously tend to get the most, but where i live they generally seem to be the wealthiest with least essential outgoings.

i said they ought to become more efficient in the way they deliver services.

LadySybildeChocolate Tue 04-Sep-12 19:43:31

Ours is asking if we want them to charge people with second properties/people who own empty homes more.

dreamingofsun Tue 04-Sep-12 19:49:39

i do think there's sense in stopping the single person discount, especially where one person lives in a large 3+ bedroom house. 2 of my neighbours live in 4 bed houses by themselves which doesn't seem a very good use of the limited housing stock

diamanteasbigastheritz Tue 04-Sep-12 20:25:31

We've had one too. It's a national survey, I think, linked to the fact council tax benefit will no longer be subsidised by national government.

As I understand it, local councils get a grant for the difference between everyone paying full council tax and people claiming a reduced rate at the moment iykwim. The grant they get from April will be cut, so councils have to work council tax differently or make cuts to other services to make up the difference.

We have a Labour council so they being quite forthright about what's going on. I can imagine conservative councils can't hmm

ttosca Tue 04-Sep-12 21:11:21

It's not absolving them from responsibility, it's canvassing opinion referendum style. Your opinion is that they should cut council tax benefit so that you and others don't have to pay more. Other people may be happy to pay a bit extra so that those on benefits don't have to. Isn't that sort of how local democracy is supposed to work?

Gosh - how would you answer, Cogito?

CogitoErgoSometimes Wed 05-Sep-12 08:11:36

A 1.7% increase doesn't seem to be unreasonable to me.

OutragedAtThePriceOfFreddos Wed 05-Sep-12 11:28:21

It's unfair that the council will give as much weight to the opinions of people who get discounts or council tax benefit as they will to those who have to pay it in full.

If you don't pay your own council tax in full, you really shouldn't be entitled to an opinion on this subject.

If I were asked, which I probably won't be as I live in a tory area, I would say benefits and discounts need to be cut before we start asking people who are already paying their fair share (or more) to suffer an increase.

niceguy2 Wed 05-Sep-12 12:41:01

If you don't pay your own council tax in full, you really shouldn't be entitled to an opinion on this subject.

Based on that logic then I assume you also believe that anyone on JSA, IS or ESA should not be entitled to vote at a general election because they aren't contributing via income tax?

CogitoErgoSometimes Wed 05-Sep-12 12:57:12

BTW... a council tax of £2500 is pretty steep. Would you qualify for Nick Clegg's mansion tax if it came in?

ginmakesitallok Wed 05-Sep-12 13:01:11

Our council tax is almost £2500 - for a pretty typical 4 bed detached. It's just that there are so many people entitled to reduced council tax that those of us to have to pay it pay more. We don't live in a mansion!

dreamingofsun Wed 05-Sep-12 13:27:30

there are some areas locally where i think 25% of the population are retired. If they no longer get a rebate from central gov the increase on standard council tax payers would be significant. And the retired people need more in the way of services, eg free buses - which already cost the council there a fortune.

we too pay 2.5k a year. live in a nice house, but not a mansion and hardly any garden.

CogitoErgoSometimes Wed 05-Sep-12 14:25:07

OK.. It sounds high to me because I'm one of those appalling people that gets a single person discount smile Without it I suppose I'd be paying £2000 a year. It's a pity the OP got such a straight choice between 'raise council tax' and 'drop benefits'. There must be other ways to increase revenue... the much-threatened levy on rubbish, for example.

FrothyOM Wed 05-Sep-12 14:27:21

Everyone should be entitled to an opinion.

Iggly Wed 05-Sep-12 14:33:15

What is this survey?

Given that council tax only makes up some of the revenue councils get, I think there are other ways of generating income across the board for councils.

Central government gives a lot of funding to councils, so much so that they have them by the balls and can threaten them with freezes if councils dare to raise tax.

I'm all for an increase in tax quite frankly.

niceguy2 Wed 05-Sep-12 16:50:32

Didn't the govt offer local councils some money so they didn't have to raise council taxes? It was a while back and my memory escapes me now on that one.

dreamingofsun Wed 05-Sep-12 18:14:22

iggly - just out of interest, is that because you are flush with money, you benefit from the services, or for another reason??? hope you don't mind me asking.

rubbish tax is rubbish, espec when they try and con us its environmental. we recycle as much as possible but because we are a family of 5 produce the most waste in the close. one set of neighbours does absolutely zilch recycling but because there's only 2 of them produce less rubbish than us. so we would get charged the most and we already pay over 2k. Fine if you do this on how many people live in a place - but don't see how that would be feasible

OutragedAtThePriceOfFreddos Wed 05-Sep-12 18:29:06

No, niceguy, I don't believe that anyone on JSA, IS or ESA should not be entitled to bite in a general election.

That is not the same 'logic' at all. hmm confused

There are many many issues that are raised in an election, and many issues that are covered in manifestos.

This questionnaire was about one specific issue. I just don't think that people who aren't affected by the issue can have a vote on a subject that doesn't affect them. It would be like me trying to get a vote in the general election in Germany, a country I have never been to.

OutragedAtThePriceOfFreddos Wed 05-Sep-12 18:29:39

Bite? hmm I meant vote, obviously.

alemci Wed 05-Sep-12 19:26:48

i am grateful they haven't raised council tax. under the last government it practically doubled.

no one is getting a pay rise, gas and electricity seem to be ridiculous. who would want to pay anymore council tax if they pay the full wack when i think it is very expensive.

TalkinPeace2 Wed 05-Sep-12 20:23:58

Council tax should be doubled for all second homes
and ANY discounts - single person / pensioner / unemployed / student etc should only go up to band E : if you rattle around in a huge house, cough up or take in a lodger

Also any property owned by a company or a non UK taxpayer should automatically pay double band H regardless of size

FrothyOM Wed 05-Sep-12 20:40:49

No one is going to vote to pay more.

Anyway, it's a 'consultation', which translates as barge ahead with removing council tax benefit from the working age poor.

Pensioners will continue to get it.

Erk, I'm very glad I live in Scotland. Our Council Tax has been frozen since 2007 iirc.

Iggly Wed 05-Sep-12 20:50:23

No I'm not flush with cash sadly! I live in a borough with one of the lowest council tax rates in the country so it could go up - I remember seeing a calculation in council leaflets about it. Instead we've had massive cuts to youth services amongst other things (it's a tory council).

expatinscotland Wed 05-Sep-12 20:55:04

'No, niceguy, I don't believe that anyone on JSA, IS or ESA should not be entitled to bite in a general election.

That is not the same 'logic' at all.'

It isn't? Many of them paid into the system for years, just like those others who live off state benefits . . . oh, yes, pensioners! So if you're going to apply the no vote if you're on state benefit, then shouldn't it apply to them, too?

nextphase Wed 05-Sep-12 21:03:26

Interesting. Our consultation leaflet was about how should the council tax benefit amount be reduced. So about should everyone of working age contribute (they were talking £4/week), or should those on low incomes be protected etc.

No mention of the level of rise if the number of discounts isn't decreased!

Sounds like every council are approaching it differently - maybe depending on the demographic of their area?

TellyBug Wed 05-Sep-12 21:24:24

Each council is proposing their own ideas - different councils will do different things.

And I would pay £42 extra.

bureni Wed 05-Sep-12 21:28:10

Did I read that right 2.5 k council tax, thats mad

TheMysteryCat Wed 05-Sep-12 21:29:44

i would pay £300-500 more which is crippling.

no mention of charges on second homes even though i'm in an area full of them - that's very frustrating!

OutragedAtThePriceOfFreddos Wed 05-Sep-12 21:35:48

Expat, it's not a vote! People who don't pay full council tax would still have the right to vote ffs!

Its a consultation about whether council tax should be raised or not. I'd be interested to know why people who don't have to struggle to pay full council tax should be given as much weight to their opinion as people who do have to struggle to pay full council tax. It's not going to affect them. And if they really don't like the result of the consultation, then they can use their vote to make their voices heard.

And I'm not talking about people on benefits anyway. Discounts are included too. You don't have to be on any benefits at all to get single person discount. You could be a millionaire.

TellyBug Wed 05-Sep-12 21:39:50

So OP can pay £42 extra a year or themysterycat can pay £300-500 extra a year....

That's my mind made up. smile

Outraged I don't think you're making sense. If you're going to only allow certain people a say in how the changes are made, then you really need to be looking at what % of income people are spending on council tax. So if someone making £10,000 a year pays £500 council tax (after discounts) then that's 5%

Whereas if someone making £100,000 a year pays £2000 council tax then that's 2%. So surely they should be LESS entitled to a say because it will affect them less.

expatinscotland Wed 05-Sep-12 21:48:32

'I'd be interested to know why people who don't have to struggle to pay full council tax should be given as much weight to their opinion as people who do have to struggle to pay full council tax. It's not going to affect them.'

It will when they get a job! And I guess you mean students, too. They don't pay at all if they're full-time.

TheMysteryCat Wed 05-Sep-12 21:59:11

what is also difficult is that the area where i live is approx 60-70% older people,who this won't affect. the local authority is really going to struggle to raise the funds to deal with the cuts from central government.

sadly, it's the local working class families who will end up worst hit, whilst the rich second home owners won't get touched.

OutragedAtThePriceOfFreddos Wed 05-Sep-12 21:59:25

Percentage of income is irrelevant. If someone is paying the full amount they are required to pay, as set by the council, without benefits or discounts, then they have an equal stake in the outcome of the consultation.

Someone whose council tax is paid be central government, or who is wealthy and living in a four bed house but gets a huge 25% discount, isn't going to struggle with an increase.

The people who are affected by the changes the most should be the ones that have the most say.

FrothyOM Wed 05-Sep-12 21:59:32

"Its a consultation about whether council tax should be raised or not. I'd be interested to know why people who don't have to struggle to pay full council tax should be given as much weight to their opinion as people who do have to struggle to pay full council tax. It's not going to affect them. And if they really don't like the result of the consultation, then they can use their vote to make their voices heard."

Because they will lose their council tax benefit and will have to pay. This could mean going cold or hungry. I think that's a big deal, don't you?

OutragedAtThePriceOfFreddos Wed 05-Sep-12 22:02:20

It's fairly obvious what their opinion would be in those cases then without asking wouldn't it?

What about the people who already struggle to pay without a discount? As hey are already paying, and already struggling, I think their opinions should be given the most attention.

ginmakesitallok Wed 05-Sep-12 22:02:34

Outraged - people who are getting help with council tax might still be struggling to pay it. We live in a democracy - which means we get to take part in making democratic decisions about all sorts of things which don't affect us. Should healthy people have no say in what happens with the NHS? Should childless people have no say about what happens with education??

Council tax inflations might not affect those who don't pay it - but similarly council cuts won't affect the better off as much.

So, outraged, if you qualified for £100 council tax benefit then you'd be happy to not be included in the consultation. Even if the consultation was about discounts and the rest of the amount you have to pay?

ginmakesitallok Wed 05-Sep-12 22:03:48

X posts - and what about those who are struggling and are being supported by Council services which might be at risk??

bureni Wed 05-Sep-12 22:06:26

Why should people pay more for a second home, surely the council tax should reflect the services the councils provide . Having 2 or more homes should not increase the tax imo. p.s I dont pay council tax.

OutragedAtThePriceOfFreddos Wed 05-Sep-12 22:07:05

Gin, they should have some say, but not as much as the people who are already affected and therefore are more likely to know a bit about it. But then the groups of people you mention can know more about these things because of their work, in which case, they should be included because they will have an opinion which is worth something.

Jolly, yes, I would. I'd be glad that someone else was paying my share of contributions towards police, roads, refuse collections etc and and that these services weren't going without because of me and I would accept it gracefully.

TalkinPeace2 Wed 05-Sep-12 22:07:43

bureni - because second homes push up house prices leaving more people in short term social housing at HUGE cost to the council ....

OutragedAtThePriceOfFreddos Wed 05-Sep-12 22:08:07

Gin, that woudo be a separate consultation. This one is about what people contribute, not about what people take.

FrothyOM Thu 06-Sep-12 10:06:21

It's also about people who cannot afford to contribute who will be forced to pay when they cannot afford to. I think they should be able to explain what this would mean for them. My friend, who is working on the minimum wage, will be £200 a year worse off.

Orwellian Fri 07-Sep-12 08:43:42

I think everyone should pay some council tax, even those on benefits. We all use council services, everyone gets their rubbish collected and a lot of the time people on benefits are more likely to use council services (which they will get for free because they are on benefits) than others. So, if we are all in this together, then certainly everyone should pay.

Orwellian Fri 07-Sep-12 08:49:14

What they should be doing is getting more tax out of landlords or introducing a land value tax. That way people who have benefited from house price rises and are getting unearned income have to pay more. But this will be unpopular in Westminster seeing how many MP's are landlords, have inherited their wealth or are just greedy pigs.

OutragedAtThePriceOfFreddos Fri 07-Sep-12 08:51:07

I appreciate that part of this is about people who can't afford to contribute, but its not fair that someone else who may be struggling to pay their fair share already could be forced to pay more to subsidise someone else's share.

How can anyone possibly think that's ok?

I agree that everyone shudo pay something, even if it's only a token amount. Lots of token amounts would add up, maybe even add up to enough to prevent people who are already paying a significant amount a month from having to pay even more.

The alternative is that council run services are drastically cut. We have nowhere for elderly or disabled people to go during the day, we have dirty streets and town centres because they are never cleaned, we have infrequent refuse collections, underfunded fire and police services, ill maintained roads and hedges and parks.

None of us want that, which means everyone shoukd have to pay something, and those who are already paying for those things shouldn't be expected to pay more to subsidise others.

dreamingofsun Fri 07-Sep-12 08:56:12

orwellian - taxing landlords (who've already paid income and NI on their investment and will pay capital gains when they sell) would just put up rental prices or reduce supply because people would sell. in this area house prices have gone up very little over the last 5 years

the problem is the massive increases during the last government. this means that a rise of 1.5% is quite a signif amount of money now.

OutragedAtThePriceOfFreddos Fri 07-Sep-12 08:57:11

Landlords already pay tax on their income, and they will have paid stamp duty when they bought their properties. Not everyone who has a property, or even who is a landlord will have benefitted from house price rises.

I find it wierd that people go on about house price rises on MN. They don't mean anything until you are elderly and might want to downsize. My first property has risen in value, but it means nothing. All the other houses have risen in value too, so it's not like I can get anything extra because of that house price rise. It makes no difference whatsoever if my house was once worth £200k and is now worth £250k on paper, I can't buy a bigger house than I already have because the every other house this size is also worth £250k.

Orwellian Fri 07-Sep-12 09:05:19

dreaming of sun - if landlords sell that would be great news. More properties on the market for all those wanting a home rather than an investment and if lots of properties were to come on to the market it would reduce prices.

Most landlords are older have benefited from low house prices, free university education, good pensions etc. They are the ones reaping the benefits of the financial crisis at the expense of the younger generations who are basically paying for their pensions and paying for their rental properties. This section of society (the landlord class) pays very little as most of them have accountants who are able to reduce the tax they pay. A land value tax would put an end to a lot of the "get out paying tax" clauses for the already wealthy.

Orwellian Fri 07-Sep-12 09:09:40

Outraged - of course people are going to talk about house price rises on MN. So many young families have been forced to rent (from unscrupulous landlords) or are being forced to pay huge amounts for shoeboxes so that one lucky generation can maintain the "wealth" in their house. There is absolutely no reason why a poxy, standard terrace in London suburbs with no parking should be worth half a million pounds but thanks to Blair and Brown this is what we have now - an economy built on high house prices rather than actual productivity. How destructive this has been on so many levels and in the next few decades this will play out when the younger generations cannot afford to have families or pensions and when all their income is paying just for a roof over their heads. Labour left a disgraceful legacy!

OutragedAtThePriceOfFreddos Fri 07-Sep-12 09:29:32

There isn't really wealth in housing though, not to people that have seemingly profited from house price rises, it's all on paper and irrelevant to people's real day to day lives.

I understand what you are saying, and I pretty much agree, but it's not the fault of people that bought houses when they did that prices have risen and they shouldn't be penalised for it, nor should they be considered greedy.

They didn't know it was going to happen, they didn't ask for it to happen. They just bought houses when it was the right time in their lives, and it's only looking bak that it could be seen to be being the right time economically. But like I say, it doesn't really matter to them. It's not like they have profited in actual real terms. They might have done on paper, but where's the benefit of that when everywhere else is equally as expensive now.

People's wages are better now than they ever were, but it means nothing because the cost of living has gone up so much. It's the same thing.

You are very misguided if you think most landlors have accountants that can fiddle their tax. They don't. You are referring to the super wealthy, not just the regular accidental landlord, or even the regular BTL landlord that is just trying to better their income and provide an asset for their family.

Land value tax would be extremely unfair, would not target those people you want to hit, and it would create less affordable housing while people sold up and stopped providing a rental property for someone who can't afford to buy.

alemci Fri 07-Sep-12 10:32:43

i agree that everyone should make a contribution even those on benefits. i know the poll tax wasn't popular but it was fairer in some ways making everyone pay.

I think that with houses it is all on paper. even if you pay off your mortgage you still have no capital or a cash sum, you just don't have to pay out each month.

i am glad they are not attempting to revalue property as that always seems to be a threat and make us pay even more money that we don't have because on paper our house appears of great value.

Surely a local income tax would be most fair as then you are taxed based on what you earn rather than the value of your property - which may bear no relation to your income.

TalkinPeace2 Fri 07-Sep-12 18:40:10

Jolly
taxed on where you live or where you work?
Spent where you live or where you work?
What if DCs go to school in another county?

Land taxes are popular because houses do not move

What if your DCs go to school in another county currently? There are reciprocal arrangements between local authorities for school funding, at least in Scotland.

Local income tax should be based on where you live. Money to go to Local Authority. Where you work will pay business rates at that property already based on the size of business.

TalkinPeace2 Fri 07-Sep-12 19:28:45

But business rates go straight to Whitehall and are redistributed at their discretion.
They have not been local for many many years
nor is council tax : the current consultation is causing upheavals
www.communities.gov.uk/publications/localgovernment/2146644

Presumably some portion of govt income that comes from/goes to LAs has to be redistributed, otherwise you end up with areas of poverty getting very little funding as they take in little council tax and would take in little business rates if they got them directly. And some of those areas need the most LA services.
Sorry, I don't know enough about where council tax relief comes from yet, but will read that link. It'd be interesting also to see what the situation is in Scotland about where CT relief comes from and whether there are plans to change this. Seeing as Scotland has frozen CT.

TalkinPeace2 Fri 07-Sep-12 20:51:08

but a local income tax would leave Kensington with free champagne and Toxteth with no schools

Surely not if central govt funding to LAs was worked out on a basis of redistribution? E.g those with low local income tax incomes would get high levels of govt funding.

There also seems to be a business rates retention scheme in those consultation documents although it is heavily caveated so no LA gets (Westminster's idea) of too much or too little.

I'm suggesting it would be fairer for those paying the tax.

TalkinPeace2 Fri 07-Sep-12 21:01:28

But the point of justifying a local tax is that it stays local - otherwise its national - cannot have both ways

the current consultation is working towards keeping the money where it is raised

Local authorities get funding from council tax and central government at the moment.

Currently, folk pay council tax to the local authority. Businesses pay business rates to central govt. Other taxes like VAT go to central govt.

From these taxes, central govt funds health boards, benefits etc and also funds local authorities through a formula based on LA need.

Local income tax wouldn't be any less 'local' than council tax as LAs could vary it on the basis of incomes in their area and the level that the LA requires to balance the budget after the central govt funding has come through.

It would also be fairer for those paying it - those on low incomes would still pay little or none, those on high incomes would pay lots, whether they live in a £40k flat or a £3million mansion.

I'm arguing for a fairer tax for the people paying it.

TalkinPeace2 Fri 07-Sep-12 21:16:42

I'm a public sector Auditor.
funds local authorities through a formula based on LA need
you are clearly too young to remember militant
"need" has never truly been the issue
political expediency is all
AND
only 80% of what goes in comes back ....

you are sadly very naive about how the tax system operates

OutragedAtThePriceOfFreddos Fri 07-Sep-12 21:23:38

The idea of a local income tax is interesting, but I think I would prefer to stick to the way it's done now. Council tax is at least fair. Too much, but fair.

We already have tax on income, so it's right that we have a tax based on where we live. Let's face it, the vast majority of people who have a high income will also live in the biggest properties.

Would you have local tax based on household income or personal income?

Scot Govt Local Govt Finance page

which says
5. Total revenue funding is distributed between Scotland's local authorities using a "needs-based" grant distribution system. In addition, to ensure a stable and fair distribution of grant, the grant distribution system includes a minimum grant "floor" within the settlement calculation, to ensure that all councils receive at least a minimum guaranteed increase in revenue funding for each year when there is an overall increase in revenue funding or a maximum guaranteed decrease in those years where overall revenue funding decreases.

Also
Total revenue grants fund around 85% of Scottish local authority net revenue expenditure with the remaining 15% funded largely from the council tax.

23. The total revenue funding is distributed between Scotland's 32 local authorities using a "needs-based" grant distribution system developed over many years through consultation between central and local government. The system recognises key factors which impact on councils' relative revenue expenditure needs. Grant distribution is calculated on the basis of councils' Total Estimated Expenditure (TEE) funded from both grant and local taxation. Councils' expenditure needs are split between expenditure on services and debt servicing (loan & leasing charges).

I don't know what the percentage is in Scotland of what goes in and comes back though.

Maybe my confusion about the system is because of the differences between the english and scottish systems?

An interesting question, outraged and one I'll think about. (I don't know grin )

dreamingofsun Sat 08-Sep-12 10:04:46

jolly - local income tax does not taken any account of someone's ability to pay. It assumes everyone's essential costs are the same which they clearly are not. A young family is likely to have a massive mortgage, and childcare costs to enable 2 people to work. they would also have to run 2 cars in this area.

older people will earn a lot less but have minimal outgoings - no children at home, low/no mortgage and probably only have to have one car.

we earn a lot more than our neighbours, but they are financially a lot better off than we will ever be, and until recently we were tight on money each month.

why should the financially poor subsidise the well off via local income tax?

TalkinPeace2 Mon 10-Sep-12 21:03:23

dreaming
I'm confused. NO income tax takes account of expenses. Why are you picking up on local ones.

MrJudgeyPants Mon 10-Sep-12 23:26:28

One problem with the current system is that it is possible to be asset rich and cash poor. Unfortunately, when it comes to paying council tax, the council want paying in cash. I'd be happier to see council tax subsumed within income tax but the truth of the matter is that governments, both local and national, need to cut back on spending wherever possible. No more non-jobs.

dreamingofsun Tue 11-Sep-12 08:40:54

talkin - agreed talkin. But at least with the current one everyone knew where they stood. where are young high earning/high expense families suppossed to find all the extra money from to subsidise low income/possibly asset rich older people?

mrjudgey - but at least that way you can sell/release some of your assets. My retired neighbours all have several properties. why should a struggling younger family subsidise their local tax - the younger family probably don't have massive savings to draw on either.

MrJudgeyPants Tue 11-Sep-12 23:33:41

"My retired neighbours all have several properties. why should a struggling younger family subsidise their local tax"

Who uses the local council's services?

OutragedAtThePriceOfFreddos Wed 12-Sep-12 07:18:17

Very good point MrJudgey.

People, especilally elderly people, who have more than one property are usually renting it out to supplement their income. They aren't doing it to be greedy and make things harder for other people, they are just doing what they can to improve their own standard of living. The same as anyone else would. I think it's unfair the way second home owners are seen as some kind of enemy.

dreamingofsun Wed 12-Sep-12 08:53:46

i wasn't picking on 2nd home owners per se - but using this to indicate that they are wealthy.

mrjudgey - tax is not based on useage. if that were to be the case the unemployed would pay a lot more. Retired people use a lot of medical services so their income tax would have to rise if you use your argument.

OutragedAtThePriceOfFreddos Wed 12-Sep-12 09:19:11

Why would retired peoples tax have to rise but not that of young families? You asked where families were supposed to find the extra money to subsidise older people from, but where do you think older people are supposed to find money to subsidise families from? It works both ways.

That's why it is fair that each pays council tax according to the property they live in.

As has been said, it is very possible to be asset rich and cash poor. Having more than one property does not automatically make someone wealthy, no matter how much you want to believe that. We need to ensure that government policies don't penalise people for trying to be self sufficient without relying heavily on the state, otherwise no one woudo bother to save for their retirement. No one would bother to maintain that extra property to fund their retirement and then the state woudo have to pay out even more in welfare. People shouldn't be expected to sell something that have worked for to pay tax when they already pay their fair share.

dreamingofsun Wed 12-Sep-12 10:30:25

outraged - you used the argument that young families use more local resource ought to pay more tax. Older people use more healthcare which comes out of national taxation - so extending your argument to its logical conclusion they should pay more income tax - if you are saying tax paid=useage of services.

currently older people are not necessarily subsidising younger families as rates are based on the size of a house. People knew this would be the case when they purchased a place. if you suddenly change the way its calculated - ie replace rates with local income tax - then this will cause problems for certain groups of people namely income rich/asset poor/high cost base people and these tend to be younger 2 income people with families.

i'm sure younger people would love to save for their pensions and i agree this is a great principle. but if they are paying out vast sums in local income tax, plus massive mortgages and childcare they are not going to be able to do that.

as i've explained before, i was just using the property example as a justification for why i thought they were rich. this was not the main thrust of my argument

MrJudgeyPants Wed 12-Sep-12 12:17:33

dreaming It should be pointed out that National Insurance is exactly what it says it is - it is an insurance against being out of pocket. It exists so that the individual who falls ill, loses their job or lives long enough to get a state pension doesn't end up impoverished and starving. The whole point of the system is that the average taxpayer will, on average, get back more or less what they put in (they will on average get a lot less due to inefficiency but that is a different post on a different topic).

With other services provided by government through taxation, the principle of what-you-put-in-you-get-out evaporates. The inefficiency is still endemic, but now we are looking at providing many services that we don't want (non-jobs), don't need (HS2), would benefit from open competition (refuse management) or actively glue up the economy (renewables obligations). Factor in that many of these vanity projects are the brainchild of a politician whose only experience of the real world is three years at Oxbridge reading PPE and it's not surprising that tax is high yet value for money is so bad.

MrJudgeyPants Wed 12-Sep-12 12:18:28

The only stable solution is a low tax one.

OutragedAtThePriceOfFreddos Wed 12-Sep-12 12:52:29

outraged - you used the arguement that young families use more local resource ought to pay more tax

Err, no. I didn't say that at all.

I agreed with another posters point that young families use resources, which came in response to your point about families subsidising older people!

I think everyone should pay a fair share of tax, that includes families as well as older, or single people.

Please don't misrepresent me.

MrJudgeyPants Wed 12-Sep-12 14:22:49

Outraged Following on from the 'Does Inequality Matter' thread, what would you define as a fair share of tax?

OutragedAtThePriceOfFreddos Wed 12-Sep-12 16:45:17

I can't remember what I wrote on that thread, so not sure how this will relate.

Its hard to define a fair share, and I don't think the system exists that would be perfectly fair for everyone. I dont think i can give a definative answer to that question. I think the council tax system as I know it in my area is completely fair. It is based on property size, and I think it's fair to assume that the majority of people live in a property suitable for their needs.

I used to live in a huge 4 bed house which I owned outright thanks to an inheritance, but when I split with my ex I couldn't afford it anymore, even with the council tax single person discount, so I moved to a smaller cheaper property. That is perfectly fair IMO. I bought a very small studio flat with the remainder of the house sale money which I rent out to give my income a little boost so that I can afford to work term time only to be able to be around for my dc.

I am one of those asset rich and cash poor people you were on about. Unsurprisingly, this is one reason I think a tax on second properties would be very unfair.

Income tax is, I feel, a lot less fair. I think the 50% tax rate was a joke, and 45% not much better. I would prefer a higher personal tax allowance and a flat rate for all. Although I know bugger all about economics so I'm not sure how this would work in reality, but it made sense to me when I read someone else's explanation.

So, what would you define as a fair share of tax?

MrJudgeyPants Thu 13-Sep-12 00:05:12

Outraged you’ve hit the nail on the head about increasing the personal allowance and flat taxing everything above that. I'd like that flat tax to treat dividend payments and interest as income too (with, perhaps, a higher personal allowance for company founders to reflect the fact that they are gambling their prosperity for the benefit of our society). I'd like to see most of the current taxes abolished but would give priority to abolishing taxes on business in the hope of attracting multinationals to these shores (as Ireland did prior to the crash). This could turn Britain into a huge tax haven with all of the benefits for jobs and tax receipts that would bring.

So, what is a fair share of tax? I'm generally in favour of people taking as much responsibility for their actions as possible (with exceptions made for the elderly and disabled) and loathe irresponsible behaviour being bailed out with responsible people’s money. Similarly I think that government, where intervention is unavoidable, should look to providing funds to a competitive free market and buy in services - for this reason, I support widespread privatisation of schools and hospitals and have services provided free at the point of use through the voucher system.

What I'm trying to say is that I believe taxes can and should be slashed across the board. The taxes that will have to be raised should be raised through the income tax mechanism that you suggested, albeit a revised mechanism where the definition of income is broader than that used today.

One benefit of having a single tax rate that kicks in above a personal allowance is transparency. If the percentage of tax that an individual pays over and above the personal allowance varies it is easier to hold the government to account. Knowing just what the buggers are taking off us each month focuses minds like nothing else.

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