Vince Cable was on the BBC just now getting a bit shirty that he was being asked questions about his supplementary tax on houses valued over £1million. As I’m against any new tax that brings a foot in the door for future increases I thought the BBC reporter was asking good questions.
The other thin end of the wedge is the clear statement that a form of council tax will be used to reduce income tax which is the opposite principle to what many people want, e.g. road tax pays for roads.
The other side is that there is some truth in the Liberal Democrat position. Most people pay council tax on a sliding scale but when it gets to a certain point it ceases to slide. There is no council tax band above H which in general means a cap of £3,000 per household on council tax.
A halfpenny on the increment above £1m, say it was on a house worth £2m would be £5,000. If you live in a £2m house £5,000 a year or £400 a month is big enough to prick I’d think, coupled with the new 50p tax rate in some cases. So it’s too much. Therefore I’d support additional council tax bands with an increment of a few hundred between each as now although there are losers and exceptions with whatever system.
I vote that the Sage of Twickenham has got it wrong on this matter.
The Lib Dems are also supporting Local Income Tax. This can be paid as an increment on Income Tax. I’m not sure where the break even point is. Is it that a house with 1 average wage taxpayer breaks even with the current system? Those with large incomes or say 2-3 low to middling incomes will pay more. Sounds a bit iffy.
Then the Lib Dems want to make the tax threshold £10,000 so presumably you won’t pay council tax if you earn less than £10,000. I’ve long thought the tax threshold way too low and for Labour to actually make poorer people pay more tax by removing the 10p rate is astounding.
To take this a bit further the Lib Dems also support the re-valuation of houses for council tax purposes in England, if council tax continues. Personally I fully support this as our house was right at the bottom of a band. Although in Wales it turned out that most houses went up a band. If the charge on bands came down I’d say that was OK as the overall tax demand should not change. In Wales it appears to have been a money grabbing exercise. Can this be avoided in England. Probably not.
In general the Lib Dems have some interesting points here although I’m not sure whether I agree with the way they are being implemented or if they are safe to be implemented. I’ve never voted LD and doubt I ever will as they’re soft on too many subjects, although they have moved in a more flavourful direction.
The Lib Dems are “soft on too many subjects”. Really?
I would argue that a realistic approach to issues is far better than a dogmatic approach.
There is no such thing as road tax, not least for the reason that this country has a long tradition of non-hypothecated taxation. Anyone may use any non-toll road (barring motorways) without paying any charge or tax for it.
The Council Tax is scarcely any fairer than the Community Charge it replaced. The amount paid by any given household has scant relationship to that household’s ability to pay.
Hi Longwayround,
Noticed you have a Lancashire blog with a Southend United banner, an unusual combination. We went to Southend on a day visit last year and it seemed a pleasant enough place. Although the resort attractions weren’t as big as I expected.
I agree with all your points. I’m not sure if there is a bit of misunderstanding about what I meant by road tax. The license disc is often known as Road Tax, I wasn’t referring to charging a sort of road toll. Some people do say that a larger proportion of the tax paid on license discs should be spent on roads, although I’m not saying I agree with that either.
To be honest I’ve never understood why people didn’t like the Community Tax except that it maybe didn’t seem to account for ability to pay. In reality I’m sure there would be a lot of rebates and allowances. I’ve also never understood why the tax should be the same no matter how many are in a house.
Pete