Council tax is unfair because it is not linked to the ability to pay. My wife and I are retired and earn between us less than 30K. The people either side of us earn around 150k per couple. Our house is slightly bigger (well it has a double garage - the neighbours have a single, garage). and is in a higher council tax band. We earn less - but pay more council tax.
I said "earn" less than £30k - I meant we have pensions and some savings income. Obviously not "working people" as the government keep banging on about.
How much income tax do those couples pay on £150k vs. what you pay on £30k ?
What are the chances one of the moaners will tell us it is right for a person with a five million pound house or a hundred million pound house to pay the same as a person with a one million pound house.
In overall taxes, it's likely that they do pay more.
But if we're talking council tax, then are you suggesting that someone in a £5M house uses 5x the local services that the person in the £1M house does ? Or 50x the local services that someone in a £100k house does ?
OK, there's a good chance that they might use some more - e.g. more expensive houses tend to be on bigger plots, so more road length/house; and they might spend more on "stuff" and fill the bins faster; but generally I suspect there's not all that much difference. They may even use less services - for example, if someone is wealthy enough to send their offspring to private schools, that's less demand on the local council funded schools.
Average council tax bands:
Band A £126 per month
Band H £380 per month
So diff between lowest and highest is 3x
Band A is say a studio flat worth £200,000 so that means the top band H should be about 3x that ie £600,000 ……..but we all know pretty much all 4 bed detached houses are worth more than that across most of the country.
It’s laughable that a £3million house only pays £380 a month council tax.
As above, what demand do they put on local services ?
And don't forget that it's already been pointed out that some (possibly a fair number) of people couldn't pay the wealth tax that it's been mooted might come in the next budget. Consider someone (assume a couple) who have worked hard, got themselves a nice house they don't want to move out of, but through no fault of their own is now into "wealth tax" territory. Unless they also have good pensions, where does the money come from to pay the tax ?
Put another way, wealth does not equate to disposable income. If someone has high disposable income, then it's almost certain that they pay tax on it - whether that's income tax on earnings, pensions, share dividends, savings, ... or capital gains tax on selling stuff (or buying and selling stuff at a profit).
It's also worth remembering that the wealthier people are, the more able they are to avoid paying taxes - for example, if the country over does it with taxes, they can just bugger off somewhere else that charges less. That's been proven time and time again - tax too much, the ones you are trying to tax bugger off, you end up getting less tax (and lose the investments etc. they might also have that support the economy - such as by funding businesses through buying shares). Hmm, wasn't it a Labour government that tried a 90% tax rate - IIRC that just made people leave the country.
Mostly explained by the
Laffer Curve - apart from the problem that it's impossible to know what the curve looks like or where the peak is.
I recall reading an excellent explanation many years ago, by way of a metaphor.
A group of 10 friends would meet up and go out for dinner on a regular basis. At the end, they'd split the bill - one paid a lot more because he was quite wealthy and could afford it, a couple paid nothing as they were very poor and the others covered their share of the bill, and the others paid various amounts based on their disposable income. Because they were regulars, the restaurateur decided to offer them a discount - which caused arguments over who would get what share of the rebate. The end result was that the person who was effectively paying for 3 or 4 meals decided he'd had enough and decided not to join them the next week - and thats' when the other 9 found they no longer had enough money to pay the bill.
