Should council tax finally be abolished?

[writingoutloud]

Hi all, firstly sorry for the rant but I'm starting this thread because i came across this article in The Guardian (see below) about how a good number of local councils are going bankrupt, including Woking and Slough.

I mean, I'm just getting so sick of paying council tax myself especially since it's taxed AFTER my income tax, so essentially we are all DOUBLE TAXED.

I understand that bin waste removal, social care and fire department etc need to be paid (and so they should be) but this is not it. It has to change.

I'm just wondering what other people's thoughts are because in all honesty, this cost of living situation and seeing councils just do whatever they want with resident tax payers money seems to be getting out of hand, and who will probably get punished for it all and bail them all out... tax payers 🙄

https://www.theguardian.com/society/2023/aug/28/at-least-26-english-councils-at-risk-of-bankruptcy-in-next-two-years

Thanks a lot for that, manontroppo - very interesting to hear another perspective on it from an actual local!

I’m not a tax expert, but there are people who are.

i personally think the current system is unfair on poor people. Hand wavey “I shall do this, and I shall do that” is of zero consequence to me- I no longer live in the UK for one.

Council Tax is a punitive tax on poor people. If you disagree and think that it isn’t punitive then make the case.

I can’t see an easy alternative to council tax but I would make changes starting with looking at the statutory obligations on councils. And looking at all of the exemptions. Properties with students don’t need to pay but they still need their rubbish collecting, as an example. And it’s not right that many poor areas pay higher council tax than richer areas (likely due to there being more exempt properties and higher need for council services).

Local governments have seen a massive reduction in funding from central government. That is why they are bankrupt.

*"Also, as I said, a very large amount of council tax must surely be spent on administering and collecting council tax, so that could just disappear"

There would be cost incurred for administering the increased taxation though? It would just move to HMRC not the LA.

I'd also argue that having local services at the mercy of central government allocation wouldn't be in most areas best interests.

Some bod sat in London, who's never set foot in your City, Town or Village deciding how much to give and to what, with no knowledge (or care) or local issues and pressures.

Most LA workers and Members at least have a vested interest by being residents.

I’ll add to the discussion by posting as a parish councillor, the lowest tier of government. Incidentally, in a county a long way from going bankrupt.
Part of the council tax will go towards the ‘parish precept’ which your parish council will spend on maintaining local services and support local (usually charitably-run) events. The parish councillors, all unpaid volunteers, will work through a parish clerk, employed but often part time, to ensure publicly owned grass is cut, bins are emptied, publicly owned areas are kept safe and maintained (such as play parks, possibly car parks and loos, all manner of things). Insurance has to be paid, fees to goodness knows who, local groups financially supported, particularly for the vulnerable…. The list is too long to mention.
In my village the social media moaners often aim insults about what they perceive we should be doing (usually involving removing dog dirt) and we’ve been accused of only being in it for the money and also for creaming of the precept. I do approx 11 hours of unpaid work each month for my local community, work delivered through payment of the council tax. Would you?

Council Tax is a punitive tax on poor people. If you disagree and think that it isn’t punitive then make the case.

Nobody with a shred of honesty could argue any different.

Yes, property values have obviously risen since 1991 - which is actually a huge disadvantage for the vast majority of people and not the celebration that many people think - but it is deliberately set so that the richer you get and the more expensive a house you buy, the cheaper your tax is.

Somebody struggling with the mortgage for a reasonable family house near their work in the South-East could end up paying the same actual amount of money in council tax as the owners of the Chatsworth House estate.

Probably more.

Especially if they're in a property that was built after 1998. The two bedroom ones in this borough built after that date are valued as higher band than older two bedroom properties, even though they sell for lots less money and are smaller.

But, can't argue with valuations from 25 years ago.

It's pish.

In the example a pp gave of Grimsby, that council tax bill of £1500 is around 10% of minimum wage take home. I bet there aren't many people in the London Borough of Westminster paying out 10% of their take home on council tax, even though they get their rubbish picked up every day and their kids - unlike Grimsby kids - get free city wide travel

About one third of a council tax bill goes towards public sector pensions, their pensions should be self funding. There will be a lot of people paying this who cannot afford a pension of their own.

Council Tax is a punitive tax on poor people.

Depends how you define poor. People on benefits qualify for discounts on Council Tax, up to 100%.

I think there is a crossover region, as with Housing Benefit and other concessions, where some people earn just a bit too much to qualify for assistance so end up worse off than those with smaller incomes. But everything has to have rules, and the criteria for what support you can get are already complicated. (Check entitled to if you think you should be getting help.)

Fact remains, though, that the poorest citizens are definitely not being made to pay full council tax.

Even people on JSA have to pay 15% though. How they're supposed to do that on £70 a week I'm not sure.

And the working poor are absolutely hammered by it. It's a massive portion of minimum wage income. As a portion of £100k, it is of course minimal.

The state pension is hardly self funding. Most draw out in excess of what they pay in. Approximately 50% of the population takes more from our collective systems (education, health and what not) than they pay in tax. Very few people are truly net contributors. Most workplace pensions have an employer contribution element, why should an LA be any different. Without the appeal of a reasonable pension, you might find that there are even fewer people willing to provide the essential services, like social workers.

I understand your point that single people may be more expensive than half a couple. But then people with disabilities, needing care, or with children are also more expensive, but we're not asking them to pay more. (Unless you think that would be the way forward?)
Your example of someone needing care is basically someone who's temporarily disabled. Should all disabled people be charged more, by the same reasoning? Should we leave emotion out of that too?

Surely if we're going down the "who uses more services" route then people with children, who have made that lifestyle choice, should be way up the list before we start penalising those due to situations beyond their control.

But even if it was meant to based on use of services, then why on earth are three or more adults paying less pp than a couple?

Except when you have local authority housing in rural areas which means low income families have to pay high levels of council tax. They haven't found a better system though so we are stuck with it

absolutely!

Also I think the revaluation of council tax bands is a red herring. It’s about relative value - property size being chosen as the metric by which amount of council tax due is calculated.

All a rebanding based on current values would do is move some small flats into super expensive high value bands, and yes, it would need creation of more bands to reflect the growth in house values at the £500k end. So effectively a property wealth tax, which I’m not adverse to.

The problem with replacing CT with additional income tax is it breaks any connection between where you live and what you pay. You could of course have a local income tax - but then how do you account for people who don't have a job ? And how do you apportion charges in households where some work and some don't ?

As someone who happened to be in Trafalgar Square one day in 1990, the history of the poll tax had nothing to do with making anything fair (these were the days of Thatcher you need to remember) and everything to do with educating people not to vote for the opposition. The big idea being if you had to pay for your councils "loony left" policies then you wouldn't vote for them. It was all going so well until the naice people who had done alright out of the rates (i.e. Tory voters) suddenly realised it was going to cost them more. I especially recall a pair of true-blue-rinse Tory voters being interviewed (BBC - it'll be in their archives) when they realised they would have to pay a poll tax each, rather than the cheaper rated value of their home. And that - as they say - was that.

The other problem with the poll tax was enforcing it against a society where thousands of people move house every single day. And that's before they are deliberately trying to dodge the poll tax.

And despite all the promises from government, the 1991 census was illegally used to create poll tax demands. I won a bet on that.

As with the similar debate on democracy ... council tax may be the least worst option.

Yes, there are always critics of the Parish Council in villages. Next time there are elections those moaners can stand for Parish Council themselves. We have a fairly good idea of what percentage of them would do.

Local authorities are going bankrupt because they don't receive enough funding from the Government they are responsible for funding a host of things apart from bins, roads and the fire service including youth services, parks, education, funding early years,social care public health etc

And Councillors don't get a salary they can claim expenses but no salary.