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Monday, February 19, 2007

Yet another stealth tax?

The Western Mail reveals that the Welsh Conservatives intend to spend the recess campaigning against the council tax with a claim that homes with nicer views were left with bigger bills after the controversial 2005 revaluation.

They tell us that the handbook used by the Valuation Office Agency reveals that inspectors were told to take into account whether properties were near shops or public transport or had pleasant views. Although the guidance related only to mobile or park homes rather than conventional houses, the Tories say it reveals council tax to be "the cruellest stealth tax of all".

They are absolutely right. Council Tax takes no account of people's ability to pay and penalises elderly people on a fixed income particularly harshly. By a remarkable coincidence this is the group of people most likely to vote.

What political party would be so callous as to introduce such a tax. Oh yes, it was the Conservatives! How did they think Council Tax would work?

The stink of opportunism and hypocrisy from the Tories on this issue is overwhelming. The day that the Conservatives start to support a viable alternative, such as for example a local income tax as advocated by the Liberal Democrats, I might start to take them seriously.

Update: The Tories really are in denial on this issue. Richard Hazlewood on his Sky Blue Thinking blog states that Welsh Conservatives 'have always accepted that revaluation was a necessary part of council tax'. Their beef apparently is with the 'incompetent' way that Labour have handled it.

Admittedly, it would have been possible to have had a longer period of transitional relief or to change the bands more radically, but that would still have produced losers and winners. The problem lies in the nature of the tax. As a property tax it is inflexible and fundamentally unfair.

We have now established that the Tories introduced Council Tax and that they were in favour of revaluation. How can their opposition to the last revaluation exercise be anything less than cynical and opportunistic, when they have still not put forward an alternative?
I still remember the shock at reading a post-marriage pay slip. The Conservatives were found of touting that they were in favour of marriage and backed the continuation of the marriage tax allowance. So I expected to see an increased tax allowance reflecting that I was now married (I think the wife was still looking for a job), but oh no, I got the increased tax allowance and an attached note saying that there was a claw back on the marriage tax allowance. After that I simply could not trust anything the Conservatives said ever again. I don't think the current Conservative Party leadership can be trusted - they say one thing, but, imho, will do the opposite if they get back into power.
Its fair enough, the principle that your property price is affected by the local amenities is obvious.

Naturally, we should be taxing the value of unimproved land not the property.

(Local income tax is a non-starter, the sooner we ditch it the better)
Why shouldn't houses with nice views be taxed more heavily than those without? After all, they are WORTH more.

Why should people sitting on huge assets be taxed less heavily than the rest of us?
James, you ask "Why should people sitting on huge assets be taxed less heavily than the rest of us? "

What about the little old lady, widowed and left in the family house? Her income could be below the poverty line. What is she going to do? Sell her lifelong home?

It's also not necessarily true that people in bigger houses produce more rubbish, need more streetlighting etc.

Council revenue shouldn't penalise you for what you've decided to spend your money on. It should tax you by ability to pay, and everyone who can pay should pay. We shouldn't have the sterotype little old lady in a tiny house paying more per head than a band F property with a large family.

In my opinion, the local income tax is the only progressive way to pay for local services.
As a home owner I am a wonderful source of income for any Government: I spend years maintaining and improving - loads of VAT; Once improved I pay more Council Tax; If I need long term care my house is used to fund it: If I die before this eventuality Inheritance Tax takes a cut. Clearly I am being encouraged to sell my house and invest in a static caravan - band A; little maintenance; loads of money to spend on myself-cars, flights abroad etc.
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