Addressing the problem of financing local authorities

[Duke Fame]

All these average figures are fundamentally flawed, as the tax is placed on the household and not the person. Therefore you need to calculate the average household income and then the council tax as a percentage of that.

In my case the tax represents less then 2% of household income. A bargain. As my kids leave home this will rise.

For a house that is occupied by a single person it is obviously a lot more. But this just demonstrates how unfair it is to tax a dwelling rather than its occupants. The poll tax was a lot fairer in that it taxed the users of the services, irrespective of how many lived under a single roof.

Absolutely, that really is the point. The council tax system is unfair and only marginally better than the rates that preceded the poll tax.

Poll tax had it’s flaw in that it didn’t have a link to earnings but surely that can be addressed with a local income tax.

[Harry]

All these average figures are fundamentally flawed, as the tax is placed on the household and not the person. Therefore you need to calculate the average household income and then the council tax as a percentage of that.

In my case the tax represents less then 2% of household income. A bargain. As my kids leave home this will rise.

For a house that is occupied by a single person it is obviously a lot more. But this just demonstrates how unfair it is to tax a dwelling rather than its occupants. The poll tax was a lot fairer in that it taxed the users of the services, irrespective of how many lived under a single roof.

[Duke Fame]

even with your figures  we have the average guy spending nearly 8% of income on council tax, it's not really acceptable.

I obviously need to get a new calculator.  According to mine, £1,225 is just under 5% of £24,783.  

However, I appreciate that nothing will shake your conviction that whetever the actual figures are, it's still too much.  Oh, and that SMBC squanders it.

As I suggested before, Duke, I think it's time you stood for the Council and showed them the error of their ways.  

Nowt wrong with your calculator, just remember to show your workings. I'm sure in school you were encouraged to think a little deeper about a problem. You will need to think on, do you pay your council tax out of gross or net wages?

I'm not going to shake my conviction that the current system is inherently unfair and worse in many ways than the much derided poll tax.

With VAT in the news it's very much de rigueur to talk about the impact of tax on the low paid. Council tax is far more regressive than a VAT rise and along with privatizing the BBC, the most obvious way of helping the low paid.

[Dave]

even with your figures  we have the average guy spending nearly 8% of income on council tax, it's not really acceptable.

I obviously need to get a new calculator.  According to mine, £1,225 is just under 5% of £24,783. 

However, I appreciate that nothing will shake your conviction that whetever the actual figures are, it's still too much.  Oh, and that SMBC squanders it.

As I suggested before, Duke, I think it's time you stood for the Council and showed them the error of their ways.   

[Duke Fame]

How is the average council tax bill £1225?? It ranges from £1039 to £3119 a year dependent on band with Band D ( regarded as the median figure, all other amounts being calculated as fractions of or multiples )being £1559. No one pays £1225.

The averarge earnings figure is also questionable - £23,260 is the most accurate figure I could find for SK .

Here's the source for the average SK Council Tax.  As you say, no-one actually pays this precise amount - it's just the average.  http://www.upmystreet.com/local/council-tax-in-stockport.html

Here's the source for the average pay: http://www.locations4business.com/agencies/publications/files/019c730b.pdf  You'll see that it is a weekly figure (£476.60), which annualised becomes £24,783. 

Certainly, my estimates were in line with Mr moorendmand but even with your figures  we have the average guy spending nearly 8% of income on council tax, it's not really acceptable.

We've preended that the UK is a good place to do business, because it's a low tax society. As the average earner sees 40% of his income go to the obese state,  it's even less attractive for the more ambitious high earner.

[moorendman]

The average person in the UK has 1.9998 legs.

[Dave]

How is the average council tax bill £1225?? It ranges from £1039 to £3119 a year dependent on band with Band D ( regarded as the median figure, all other amounts being calculated as fractions of or multiples )being £1559. No one pays £1225.

The averarge earnings figure is also questionable - £23,260 is the most accurate figure I could find for SK .

Here's the source for the average SK Council Tax.  As you say, no-one actually pays this precise amount - it's just the average.  http://www.upmystreet.com/local/council-tax-in-stockport.html

Here's the source for the average pay: http://www.locations4business.com/agencies/publications/files/019c730b.pdf  You'll see that it is a weekly figure (£476.60), which annualised becomes £24,783. 

[Duke Fame]

Margaret Thatcher tried to rationalise this in the 1980's with the poll tax, and we all know what a huge success that was.

Perhaps a better way would be just to put up income tax and collect the revenue that way, but then we would have the allocation being at the whim of central government and no real accountability to local councillors being responsible to how efficient they run the local finances.
Would be interested to hear if anyone else has got any better ideas but it should be borne in mind that there are a lot less legislators (MP's, Councillors) in the USA per head of population than here, and they (USA) think they have too many!

THe poll tax was an excellent idea but didn't have a link to the ability to pay, that's why it fell down. It only failed because it was difficult to collect, PAYE would get over that.

THe obvious thing is to collect centrally and distribute on a scorecard basis. Then council's need to manage their pot better. It would stop foolish waste like a trasport initiative campaign that produced nothing more than a brochure for£10m.

It we get to a stage of having less polititians I think we'll all be better off.

[moorendman]

we are singing froom the same Hymn sheet it would seem Duke.

[moorendman]

How is the average council tax bill £1225?? It ranges from £1039 to £3119 a year dependent on band with Band D ( regarded as the median figure, all other amounts being calculated as fractions of or multiples )being £1559. No one pays £1225.

The averarge earnings figure is also questionable - £23,260 is the most accurate figure I could find for SK .

The important change has been in the amounts of annual council tax  , an increase of 5% per annum compound on all bands seems to have been the norm for the last decade. How many of us could say that our earnings had increased by similar amounts. Ask the average self employed person and they will probably say that their pay rates have remained static.

[Duke Fame]

the average council tax bill is the equiv of 10% on an average salary

Not in Stockport it isn't.  The average council tax bill across Stockport is £1,225, whilst the average annual pay is just under 25K.  That's not 10%, it's less than 5%. 

According to SMBC website the average is £1560, ave salaries appear to be £23k (nat stats) which is 10% as you pay council tax out of net income not gross.

[Dave]

the average council tax bill is the equiv of 10% on an average salary

Not in Stockport it isn't.  The average council tax bill across Stockport is £1,225, whilst the average annual pay is just under 25K.  That's not 10%, it's less than 5%. 

[Victor M]

Local income tax looks like a very fair way of funding local services, however once you start looking at the detail it gets very messy and quite expensive to manage. e.g. Do all the revenues raised go straight to the area that raised them? Under that scenario rich boroughs like Stockport would do very well, but the relatively poorer inner city areas would not. Or does it all go into a collective pool and then be shared out by the government?
What must be remembered is that only %25 (and now could be less) of local government income comes from Council Tax, the rest comes from central Government.
Margaret Thatcher tried to rationalise this in the 1980's with the poll tax, and we all know what a huge success that was.
Perhaps a better way would be just to put up income tax and collect the revenue that way, but then we would have the allocation being at the whim of central government and no real accountability to local councillors being responsible to how efficient they run the local finances.
Would be interested to hear if anyone else has got any better ideas but it should be borne in mind that there are a lot less legislators (MP's, Councillors) in the USA per head of population than here, and they (USA) think they have too many!

[Duke Fame]

Transferred from the other thread as off-topic.

Council tax has rocketed under the last government, so much so that the average council tax bill is the equiv of 10% on an average salary (in 1997 it was less than 3%). This is obviously unfair as (considering it is popular to highlight the problem with the low paid) council tax hurts the low paid more than any increase in VAT can.

The Lib Dems included a move to a local income tax in their manifesto. Personally, I think the public should strive to get them to hold the coalition to this proposal with far more gusto than the student fee issue.

I propose that the people of Marple demand that Council tax should be replaced with a poll tax represented as a local income tax set at around 2%. Business rates, likewise should be a tax on net profit like a local corporation tax, that way the local authority has an interest in it's local businesses being profitable