Council tax whinge

[Luckypants]

Originally Posted by MiniMatt

Last attempt then, it's already been said that comparisions between the council tax over here and in the states is irrelevant - and that's precisely my point - comparisons between the two are irrelevant because as was correctly pointed out they have no meaning without being taken in the context of the total tax system.

Not entirely true, because Council Tax (and it's US equivalent) is paid directly to the council, not into the general central government pot. True whether it is an onerous amount or not should be viewed in the context of the overall personal tax burden, but Council Tax can absolutely be viewed in stand alone terms.

Originally Posted by MiniMatt

LP makes a good list of people who lose out under the current council tax system - change current council tax for a local income tax and some of that list become winners and some become losers, change it for a flat poll tax rate and again some become winners and some become losers - we'd still be sat here saying council tax is unfair to group X,Y and Z. Taken into the context of the tax system as a whole some of those peaks and troughs get smoothed out; and yet you won't find me disagreeing that there are *still* winners and losers.

Well we have agreement here. There will always be winners and losers.

Originally Posted by MiniMatt

Ring fencing of taxes has never happened, I agree that it's always been implied but it's never happened and as you rightly say, everyone knows that it's never happened.

See previous comment on Council Tax being paid to the LA. So that is ring fenced to a degree. If any of that makes it's way into the general pot, then I want to know about it!

Originally Posted by MiniMatt

On a flat tax for everyone (ala poll tax) I whole heartedly commend the suggestion - at least people are coming up with alternatives, whether I agree or disagree it's so much better than just saying "it's not fair". As you'd no doubt imagine, I disagree with a flat poll tax, but as a suggestion it deserves examination. The reason I disagree with a flat poll tax is precisely the same reason why people dislike the current council tax - it's unfair for some people. It would mean that the poor pay a greater proportion of their income as tax compared to the rich - you are penalised for being poor. Now you can take a hard line and say "well, why should I be penalised for having the ambition/intelligence/luck to get a better paying job?" - well that's fine until you realise that there are low payed jobs that are essential - you still want a mechanic to fix your bike, he's a skilled guy, he's good at his job, sure it's not the best paying job but you still need him there - why should he be penalised more heavily in tax than you? Both of you do a valid job, one gets paid more than the other, should the mechanic jack his job and come work with you instead?

IMHO a flat rate charge for council tax with rebates for those on lower incomes is fair. It is true that the tax will be much more affordable for folks on higher incomes, but the burden of paying for services has been equally shared. I'd be willing to consider a local income tax if the rate was set correctly, because I recognise that this is directly related to ability to pay. The setting of the tax rate would be crucial though.

Now I agree that no one should be penalised just for being poor, but by the same token you should not be penalised for being wealthy. This is where I have issue with the tax system in general. Council Tax discriminates against the 'wealthy' by charging them more because they have a more valuable house. Income Tax discriminates by charging 40% on income above £34K (I'm guessing as it is start of tax year). Inheritance Tax just discriminates against savers / home owners but also against the wealthy by charging a higher rate for more valuable estates.

So you can see where I'm coming from about fairness. If the tax system worked on flat rates, the wealthy would still pay more in cash terms, but the same as everyone else in percentage terms. This is fair if you accept the premise of society working together for the greater good.

+1 Ceri, and I agree I doubt anyone's going to change their mind over this now

Suppose it comes down to how many low pay jobs you believe to be less work and less stress compared to high pay jobs. My personal opinion is that there is very little correlation between the difficulty of the work (whether that difficulty be expressed in stress, physical exertion or mental exertion) and the pay received. Fireman versus doctor - one saves lives, one risks his or her own life to save others, one is mentally stressful the other more physically so. Now, if one gets paid double the other, well perhaps that's ok, it's possibly fooked up priorities but hell, both knew the score when they were getting into it... but you'd expect the one getting paid double to be able to afford twice as much stuff - but flat taxes don't work like that - flat taxes mean the one getting paid double can buy more than twice as much stuff:

Bread costs £1 per loaf.
Fireman gets paid £10 per week
Doctor gets paid £20 per week
Tax is £5 per week
Fireman can buy five loaves of bread a week
Doctor on double the salary can buy fifteen loaves of bread a week - triple the fireman.

Originally Posted by MiniMatt

Suppose it comes down to how many low pay jobs you believe to be less work and less stress compared to high pay jobs. My personal opinion is that there is very little correlation between the difficulty of the work (whether that difficulty be expressed in stress, physical exertion or mental exertion) and the pay received. Fireman versus doctor - one saves lives, one risks his or her own life to save others, one is mentally stressful the other more physically so.

I concede that the responsibilty/stress aspect is at best a 'general trend'. My brother earns about the same as me. In his job he is responsible for similarly large amounts of money AND the lives of hundreds of people. In mine, no one is going to die if I mess up. They're both stressful, responsible jobs, but his is inarguably moreso.

I would have to disagree with you in terms of difficulty. I think simple economics denotes that if something is hard (and we measure "hard" by how many people are able to do it) there will naturally be fewer people capable of doing it, and consequently they can command more money. There are of course exceptions to this rule (at both ends of the salary scale).

Incidentally, I have done plenty of low paid jobs in the past, so I'm under no illusions that it's all sweetness and light, but conversely definately recall never losing any sleep over my work, nor staying late unpaid and unnoticed after even the big boss has gone to fix something, which I can't say to be true now.

Originally Posted by MiniMatt

Bread costs £1 per loaf.
Fireman gets paid £10 per week
Doctor gets paid £20 per week
Tax is £5 per week
Fireman can buy five loaves of bread a week
Doctor on double the salary can buy fifteen loaves of bread a week - triple the fireman.

Interesting to mention food as the example; I'm actually against the European CAP because it's an undue tax on the poor. Still, I'll leave that derail for another day.

[Luckypants]

Originally Posted by MiniMatt

but flat taxes don't work like that - flat taxes mean the one getting paid double can buy more than twice as much stuff:

Bread costs £1 per loaf.
Fireman gets paid £10 per week
Doctor gets paid £20 per week
Tax is £5 per week
Fireman can buy five loaves of bread a week
Doctor on double the salary can buy fifteen loaves of bread a week - triple the fireman.

Nice twist, but we all know that income tax is a percentage. So in your case if tax is 30%, the fireman can buy 7 loaves, the doctor 14. Yes he has exactly twice the disposable income because he earns twice as much. If you add a flat rate for local service of £1 a week, then it neatly displays the 'unfairness' of the flat rate Council Tax. BUT as CT is paying for specific services, it is fair because both men get the same amount of service. As CeriJC pointed out, it entirely depends on your POV whether you believe that is fair.

Originally Posted by Luckypants

Nice twist, but we all know that income tax is a percentage. So in your case if tax is 30%, the fireman can buy 7 loaves, the doctor 14. Yes he has exactly twice the disposable income because he earns twice as much. If you add a flat rate for local service of £1 a week, then it neatly displays the 'unfairness' of the flat rate Council Tax. BUT as CT is paying for specific services, it is fair because both men get the same amount of service. As CeriJC pointed out, it entirely depends on your POV whether you believe that is fair.

So..... you're saying that we can't look at a single tax in isolation but have to look at the wider picture? My example looks fairer when you consider income tax in conjunction with a flat tax?

[Luckypants]

Originally Posted by MiniMatt

So..... you're saying that we can't look at a single tax in isolation but have to look at the wider picture? My example looks fairer when you consider income tax in conjunction with a flat tax?

If you want to view it that way. I was trying to make your example more realistic, because of how it works in the real world. I think that CT can be viewed as a separate entity, for the reasons already stated.

We're not going to agree on this are we?

Originally Posted by Luckypants

We're not going to agree on this are we?

Nope But it's been interesting

You get....

One free pint voucher
(sales tax not included, terms and conditions may apply)

Originally Posted by MiniMatt

Nope But it's been interesting

You get....

One free pint voucher
(sales tax not included, terms and conditions may apply*)

*your eligibilty to this free pint voucher is means tested. You may be required to repay any pints bought if you are later found to have been working in a higher income job at the time the pint was bought. You may also be additionally fined 1-3 vodka chasers. If in any doubt as to your eligibility please discuss this further with MiniMatt.

[northwind]

Originally Posted by Ceri JC

+1. Exactly my view of how it should work. I view council tax as paying for services that need to be carried out in my area. I want the verges cut, I want the bins emptied, I want the drains to work

...and if it's all flat charged, then regardless of it being more or less fair, nobody gets what they want because any flat charge has to be pitched to the lower earners, not the higher. You can't tax people money they don't have, so if you want a flat charge you have to charge everyone the bottom amount. So then, to compensate you'll end up needing a bigger central government grant, which still would vary depending on income. Alternatively, you just have less money to spend at a local level.

Originally Posted by Ceri JC

I agree it'd be madness to not have it in a savings account. The problem is it being abroad. It smacks of hypocrisy given customs and excise are quite happy to tax me to disincentivise me from moving money out of my country and into that of others, even when buying things which are not available in the UK.

Why is it beneficial to tax your tax? It's just an extra layer of beaurocracy, you're not generating money, just moving it around. It makes more sense for each area to get the best return possible. It's obviously not comparable to corporate or personal tax evasion, because it's ALREADY tax. There's no loss to the country, which there is if you move your own savings offshore. it's a zero sum game, taxing that income.

I am fully aware that this is not how you spell burocracy... buearocarcasy.... red tape.

Originally Posted by northwind

I am fully aware that this is not how you spell burocracy... buearocarcasy.... red tape.

No, I can't spell it either.

Originally Posted by northwind

Why is it beneficial to tax your tax? It's just an extra layer of beaurocracy, you're not generating money, just moving it around. It makes more sense for each area to get the best return possible. It's obviously not comparable to corporate or personal tax evasion, because it's ALREADY tax. There's no loss to the country, which there is if you move your own savings offshore. it's a zero sum game, taxing that income.

I agree tax on tax is usually unjust and a nasty way of concealing just quite how much people are really being taxed and is inherently 'red-tapeish' and expensive to administer. In this instance though, despite some inherent loss in real terms due to the cost of administering the red tape, don't you still end up with more money in the gov's coffers because the UK banks' 'cut' is smaller than that of offshores?

Is it not accurate to simplify it as: If you use the money and can get at some of it back, that's better than using the money in the same way abroad and getting less of it back?