Would re-introducing the POL TAX be a fairer way of collecting local taxes?

Discussion in 'General Discussion' started by Basher, 13 Feb 2019.

  1. Basher

    Basher Member

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    As we see the council tax rise year on year, what do members think about re introducing the poll tax again with a couple of amendments to how it levied?
     
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  3. The Ham

    The Ham Established Member

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    For those of us too young to have been directly impacted by the poll tax, what was it and in what way could it be improved?
     
  4. Basher

    Basher Member

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    Households were taxed on each adult living at that address. Each individual was responsible for paying there share, so two adults living there would pay two individual amounts. Property value was not taken into consideration so, a person living in an expensive house (high asset value) would pay the same as a person in a less expensive house (high band). Today you could live in an expensive house and have low income and would be paying more council tax than a high earner living in a less expensive house (low band).
    When it was the poll tax my household of two adults one working, my wife bring up the children were paying only two individual contributions, compared with a household nearby with five earning contributing five individual payments. House values were the same.
    Today we see the council tax rising and the higher rated properties say band G will have to pay a higher amount than a band B.
    When it was introduce some years ago, students were charged as a full person, which I felt was unfair.
     
  5. Busaholic

    Busaholic Established Member

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    Chris Grayling to be put in charge of its implementation: might be the only way to secure his defenestration.
     
  6. EM2

    EM2 Established Member

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    I don't think either system is really 'fair'.
    The problem with the poll tax is, as Julian Cope said, that 'the man in Lambeth Palace pays the same rate as the man who has a flat in Acre Lane'.
    And the problem with the council tax is, as Basher has already said, if you're lucky to have bought when the market was low, in what was then a cheap area (e.g. Hackney), you've got a low banding, whereas if you bought when the market was high, in an area that has got worse, then you've got a high banding (and the bandings have never changed).
     
  7. Basher

    Basher Member

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    Just a point on EM2 comment. A high value property may be fully mortgaged and the owner just able to pay the interest.
     
  8. Bletchleyite

    Bletchleyite Veteran Member

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    Despite the fact that it would result in a rough doubling of what I pay, I would support a local income tax as being a fairer option.
     
  9. Bevan Price

    Bevan Price Established Member

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    I would agree that a local income tax is fairer, but do you pay for where you live - or where you work - or a little in both areas, because you utilise some facilities in each area.
    Both poll tax & council tax are unfair because neither takes account of current income & ability to pay, Now retired, I pay the same amount of council tax as if I was working, but my current income/pension is much lower than it would be if I was still employed.

    However, it would be desirable to set a maximum rate of local income tax that could be set by councils. In the past, some councils have been over-extravagant with what are often little more than vanity projects for council leaders. Also, as I have commented elsewhere - if central government requires councils to do certain tasks /services, the central government should pay the full costs of those tasks. The present shower lie about "reducing tax" when they only mean "reducing income tax"; VAT and council taxes have been increased.
     
  10. etr221

    etr221 Member

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    The problem with the poll tax - community charge to give it its proper name - was that it was a flat rate (for each local authority) for everybody - the poor had to pay the same as the rich. While seemingly fair, it neglected people's ability to pay, and offended their sense of fairness.
    The problem with the Council Tax is that - while nominally based on property values, these are converted into bands (so at the top, occupants of very very expensive houses pay no more than those of very expensive ones), and these bands are still based on the property values of when it was introduced over twenty years ago. The same problem - failing to revalue - had hit domestic rates (supposedly based on rental values) before their replacement by the poll tax.

    While there is a strong case for a property tax (and it has the great advantage for a local authority that it is clear who gets it) the two issues that need to be sorted are (a) the need for regular (ideally continuous or annual) revaluation and (b) the problem of expensive houses with poor occupants and cheap houses with rich occupants.

    But what causes local authority taxation (by any of these means) to be the issue it has been is above all the fact that, for most people, it is the one tax that actually has to be paid, rather it being collected or deducted along the way, as ordinary payments are made.
     
  11. AM9

    AM9 Established Member

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    I think that the fairest way to rate local tax would be by the area of land that the owner or tenant has the exclusive use of. We constantly hear that property prices are too high in some areas preventing those with less funds buying or even renting them. The one thing that a council knows is the total land area occupied by the dwellings within its boundaries. That can't easily be disputed by those living in the properties. Land area is finite, it cannot be created nor can it be taken away. So a council has a predetermined income irrespective of whether there are small houses sitting in vast plots or tower blocks built to the edges. There is no incentive for councils to build smaller dwellings other than to address the need to accommodate those living in the area. Similarly, those who deny large areas of land to others will pay for the privilege.
    There would need to be controls to maintain the ratios of land use, i.e the local authority could not increase the area of land that attracts tax by building (or allowing others to develop) on land that is there for amenity or other public use. Similarly, minimum dwelling sizes can still be controlled by planning and building control mechanisms. Of course there would be the inevitable arguments of it being unfair on poor single persons who got lucky when council houses were sold off because they were occupying a large corner plot etc., so a transitional scheme could be devised to put a charge on the property that would be repaid when it was eventually sold.
    One effect of this might be to make land use more efficient, e.g. there is a lot of talk about parents staying in their four bedroom houses on large plots long after their children have left the family home. This is one of the aggravating issues in the shortage of housing stock. They can of course continue to do that but they would be paying more than they need to.
     
    Last edited: 14 Feb 2019
  12. Cowley

    Cowley Established Member

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    I think he'd do a great job. I mean the strange thing is it wouldn't even surprise me if this was mooted in the current climate.
     
  13. Bletchleyite

    Bletchleyite Veteran Member

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    It'd be where you live (so that would require a new concept in the UK of a registered primary residence). Your use of services where you work is paid for via business rates charged to your employer.

    I don't agree; local democracy needs to be able to exist independently from national democracy, and often people vote different ways for each as they want more spent on (and taxed for) high quality local services they use often - such as their bin emptied weekly (yes, in MK we still do) - and less on a national level for more "abstract" stuff. Therefore, to me, this should be purely a matter of local policy. Capping has been hugely damaging - not least it is the primary reason for the decimation of subsidised local bus services.
     
  14. Basher

    Basher Member

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    After all his performances, we might get money from him!
     
  15. JB_B

    JB_B Member

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    Presumably your question relates to Wales or Scotland. "Poll tax" was effectively re-introduced in England in 2013. ( When people referred to "Poll Tax" in the 1990s they were talking about the fact that support for community charge (CCB) for the very poorest was limited to a max of 80% of liability - rather than 100% max under domestic rates.)
     
    Last edited: 13 Feb 2019
  16. Bletchleyite

    Bletchleyite Veteran Member

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    No, it wasn't. Council Tax is more like Rates than Poll Tax, being based on the notional value of the property rather than based on the number of adults living there (though there is the single person discount - did Rates have that?)
     
  17. overthewater

    overthewater Established Member

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    Can we please keep draft political ideas of this forum? It is draft because it nearly brought down a government, it changed the PM, and cause riots..

    Here a PPB about it :s
     
  18. swj99

    swj99 Member

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    Ordinary people pay enough tax in this country already, and the poll tax has been tried before and failed. If the government stopped wasting so much taxpayers money and funded local councils properly, this question might not have arisen.

    I can't help thinking bringing it back would be a nail in the coffin lid of any party who attempted it.
     
  19. bramling

    bramling Established Member

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    I’d happily go for poll tax.

    I’ve never understood why people should pay for local services based on the value of their home. Why on earth should a single person in a high-value house pay more than a large family in a less valuable property?

    Poll tax any day for me - in my view much fairer.
     
  20. mikeg

    mikeg Member

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    Would it be fiairer? No. It would be even more regressive than existing taxation unless a stronger system of reliefs were put in place. Actually many such reliefs were put in place and the result was still overly regressive. Would it be less arbitrary? Yes. Basing a tax on the 1990 value of a property is completely bonkers.

    For one thing, it would at a time of housing crisis ensure that property is more efficiently allocated. I think we're confusing fairness and being arbitrary. Something arbitrary tends to be unfair, but one can be grossly unfair without being arbitrary. I think local government should be more properly funded, one of the great scandals is that in the name of localism more and more services are being transferred to local authorities without being funded in the way they used to be. Localism could potentially work if the councils had the money the service used to have. But it appears to me if you want true localism you have to devolve certain tax powers. I quite like the idea of a Land Value Tax* but it appears to me that if councils are to be given extra decision making power they need to have extra financing power and more importantly extra finance.

    *The problem here is one of valuation but the idea has if not cross party support a number of people from each party who seem to think it is a good idea. It also has economnic theory on its side.
     
  21. Senex

    Senex Established Member

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    I think the poll tax also has the advantage that every adult has to pay something for the local services they receive, so when they go to vote there is an awareness for all of a link between cost and benefit. The Rates and the Council Tax bill comes to just one person in the property and hits that person hard whilst others in the household don't feel the blow. I agree that in some ways a local income tax would be a better way of raising money, but the problem for me with that is that too many people would not be paying towards their local services but could still vote about them.

    I think the two big unanswered questions about local taxation have already been raised. What should local taxation pay for? I'm very muchinclined to agree with the argument that nationally-specified services (adult social services, child care, etc) should be paid out of national taxation, not local. And if local taxation is to continue to be based on property values, then (a) those values need to be kept up to date, and (b) the very large numbers of properties with values way above the top of the present bands need to be brought properly into the reckoning. Another question, of course, is how to deal with those areas of either very low incomes (if you have a local income tax) or very low property values to ensure that local authorities really do have the ability to raise enough money for the things they genuinely need to do to provide a decent environment for their people.
     
  22. The Ham

    The Ham Established Member

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    A few points.

    One Council area is putting up is council tax by 2.99%, however is also talking about making £80 million in savings over the next two years.

    Now what isn't obvious is that rise equals to about 70p a week for a band D property, but because the full council tax paid is about £1,500 people see that and think that's a whole months pay gone.

    However increase the council tax by 10% (£2.40 a week) and that Council would meet it's £80 million in savings and have £20 million a year to role back some of the worst of the previous cuts (or at least spend on reducing their ongoing costs).

    Personally I think that there should be a percentage of the stamp duty payment should be passed to the local council.

    That would then enable them to value properties without having to a) upset people by needing them to be undertaken b) pay for valuations to be undertaken. There would still be those who livid in homes for long periods who's home wouldn't be valued in that way. However there would likely be enough data to be able to make a reasonable guess at the value based on other property prices.

    Major improvements would be known about through the planning process, which could then fed into the value calculations.

    Yes there'll be those who but a run down property cheap and therefore appear to have a cheaper property than they really have add they have replaced the windows, kitchen and bathroom. However the numbers of these which would be close enough to the boundary would be faily small and the modest amount of saving for most people in this situation wouldn't make a big difference to council incomes.

    Of course if data showed that one house appeared to be under valued then councils could investigate. Given that most house listings are retained with their sold prices online, even a drive by with the external photos would show if there's been things like windows and doors replaced.

    I also think that there should be a tax on rental property income (bit on the income off those who benefit from it) and that it should be based on the energy efficiency of the property (they all have to have one) so that a very efficient property pays very little tax (say 5% on the rent) with each step towards the lower end making the tax more punitive, as an example:
    A = 5%
    B = 10%
    C = 20%
    D = 40%
    E = 60%
    F = 80%
    G = 90%

    In doing so it wouldn't be in the interest of the landlord to have properties which are energy inefficient, which benefits everyone in that tenants would also benefit. Of course those who are rich who own rental property would do rather well out of the above system in that if you could pay about 20% on their income rather 40%.

    However there would also be an incentive for builders to build efficient properties so that people would want to buy their properties to rent out. If a house builder could Design a flat which was a "B" they would sell very well.
     
  23. Bletchleyite

    Bletchleyite Veteran Member

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    You know there is a tax on property rental income? Income Tax.
     
  24. Bletchleyite

    Bletchleyite Veteran Member

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    Do you also apply that nationally, out of interest? Should income tax be replaced by a national Poll Tax charging each adult the same? There isn't much difference between Income Tax and Council Tax in terms of usage - each basically pays for services and upkeep of the administration at the relevant (national/local) level.

    Personally, I think the idea of taxation being paid as a percentage of income (so on the basis of ability to pay) with some tweaks like personal allowances is a well-established system that works.
     
  25. JB_B

    JB_B Member

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    Fair enough - I'd agree that it was the capitation aspect of community charge gave the 1990s poll tax it's name. However, it was the restriction in support for the very poorest to a maximum 80% of liability that actually led to the riots. The 2013 changes have been much worse for those with no means to pay - in some areas support is limited 50% of liability.

    https://www.ifs.org.uk/publications/13827

    It's quite likely that Scotland will get rid of Council Tax in coming years -

    https://www.bbc.co.uk/news/uk-scotland-scotland-politics-30215510

    -it will be interesting to see what they come up with.
     
  26. underbank

    underbank Member

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    You shouldn't use any tax system as a "punishment" for what could be regarded as bad behaviour from a social point of view. It comes from the assumption that there are no reasons why such a couple stay in their large family home, so they need to be penalised to encourage them to move. Having spent a lifetime working in tax advice, I absolutely abhor the idea of using tax as a punishment or "behaviour changer" - quite simply because it usually backfires spectacularly. Just look at how the 62% marginal tax rate ("tax the rich till they squeak") has caused GPs and dentists to reduce their working hours to earn less and thus avoid it, thus worsening the shortgage and increasing waiting times.

    If older people "blocking" houses is a real problem (I have no view whether it is or isn't), then we should look at the reasons why they're doing it and solve those problems - perhaps it's a lack of suitable homes to move into (i.e. the shortage of bungalows), perhaps it's because they're too old to cope with the uphieval of moving (i.e. easier to leave all their stuff in the house/loft than clear it out), perhaps they don't have the disposable income to pay for the costs associated with moving. How about incentives to help them downsize, such as stamp duty exemption if you're buying a cheaper house than you're selling, how about building more bungalows, how about making it easier or providing help to get old furniture/possessions removed/recycled?

    Back to the thread. Other posters have pointed out the pros/cons of both main options, i.e. tax on the person or tax on the property. How about doing something radical and do both. I.e. a property based council tax charge, AND a personal based poll tax. So a household pays more if it's a bigger house, AND pays more if there are lots of people living there. Set it so that your "average" household of two adults living in an average house pay the same as they do today. So if there are 3 adults, they pay a little more than a house with 2. A house with 1 pays a little less. 2 adults in a big house pays more than 2 living in a small house. Avoids all the downsides of a local income tax and more proportional to local service usage, i.e. more people means more garbage, more use of local services, etc., but there's also the "wealth" element of the property based tax.
     
  27. underbank

    underbank Member

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    Partly. But where it fell down more was that the end result actual costs (bills) were far higher than they were proposed in the earlier planning stages. When it was first announced, the "per person" poll tax figures weren't too bad and with the discounts weren't too unaffordable, even for the "poor". However, as it got closer to implementation, the sheer number of people who'd be eligible for discounts was so high, that the headline "base figure" per person rose enormously - I think there'd been some pretty poor forecasting at the planning stages. The end result was that the "tax" itself was far higher than forecast, and obviously that mean the poorest were hit with a far bigger bill than they'd been expecting, far higher than what they may have accepted. You couldn't give them a bigger discount, because that would increase the main rate further still, so would likewise increase the discounted figure again. There wouldn't have been riots if the discounted rate had ended up as low as it was forecast at earlier stages - likewise, if the figures had been shown to be so high, it would never have got passed the planning stages.
     
  28. 433N

    433N Member

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    The funding of local government by central government continually decreases owing to tax avoidance by multinational tech monopolies.

    What about getting fair corporate taxation first and see what shortfall needs to be funded locally ?
     
  29. Bletchleyite

    Bletchleyite Veteran Member

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    Yes and no. I think most of us here would argue that fuel tax should not be abolished?

    I think the main issue there relates to Council houses, and the "bedroom tax" is a solution to that (not actually a tax, of course). This did have some issues such as imposing it on people who couldn't move, but with some important tweaks I believe that would be a fair solution.

    With regard to privately owned and rented housing the shortage is not of larger houses but of smaller ones, because larger ones are more profitable to build, and because blocks of flats are not built for quality but on the cheap so aren't nice to live in, plus the issues caused by leasehold (we really do need to move to a more Scottish style system of flat ownership in England).

    Bungalows are not really a good solution to anything (other than the niche of providing housing for those of limited mobility) because a 2 bedroom bungalow takes up as much land as a 4 bedroom house.

    My view is to either bin stamp duty entirely, or to increase the threshold to a very high level which is how it was before recent significant increases in prices. It is a tax on mobility - for homes and for work - and in that sense it is about as negative a tax as one could imagine in its effects. Taxing land value is a far better way to tax property if indeed you do that at all - what you own, not how often you move.

    But by and large Council Tax is already like that for the most common sizes of household (due to the single person discount). So that would be a big change which would affect only adult (non-student) house-shares and young adults still living with parents, which is really somewhat of a sledgehammer to crack a nut.
     
  30. DarloRich

    DarloRich Veteran Member

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    perhaps some posters are too young to understand just how badly the poll tax worked last time. it is the same lack of knowledge that leads to silly people thinking communism is good idea!

    Local Council taxes may need changes ( may) but the poll tax is not the answer.
     
  31. DynamicSpirit

    DynamicSpirit Established Member

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    Interesting. Did anyone else watch that Conservative party political broadcast to the end, and notice the visual hint that was clearly intended to communicate that the other parties are bad because they support *gasp* gay people.

    How times change...
     

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