Every way of raising local tax is fraught with difficulty.

I have some degree of sympathy with all of Council Tax (despite being put in Band F for no good reason and being in the midst of an appeal which has so far dragged on for nine months); local income tax; land value tax; local sales tax; variable business rates; service and congestion charges; local inheritance tax; and maybe others.

This will always be a poisoned chalice for the Government, and the 'big idea' that I'd support would be letting each Council choose for themselves, within reason, which they use and in what proportion. That would lead to more meaningful local elections, stronger local democracy, a practical experiment in the effects of each, and national Government able to focus on getting national tax and spending policy right.

It is long overdue for reform and the idea of allowing local authorities to decide between several different forms of taxation. It is also long overdue to increase the proportion of local government spending that is financed by local taxes, to stop the gearing effect giving a distorted view of local spending choices. A property-based tax, with suitable allowances for those who cannot afford it, is still a good base for local taxation. Instead of being based on the rental value (as with rates) or the capital value in bands (the council tax) it should be an annual proportion of the capital value. Revaluation on a regional basis to stop large band changes. Local authorities are too big to have a separate sales tax but I think it could be tried on a regional basis. It would have to be a separate tax to VAT. The return of business rates to local control ought to be done but to be successful, local authorities should only alter the rate poundage within a defined limit. Depressed areas should be encouraged to drop their business rates in order to attract business, and all local authorities should form more adequate means of consulting with local businesses.

Reforming local taxes is something our government shouldn't carried out far earlier. Council tax has left many people I've known quite badly off, particularly young adults starting off in life. Unfortunately whenever I've mentioned that in Labour circles, it's fallen on deaf ears...

I'd welcome a local sales tax. Living nesr 3 authorities, I could and would shop around.
I'd welcome a local income tax. I would pay nothing.

Frankly too little too late.

Council Tax, Poll Tax, Rates - whatever you want to call them - are really irrelevant.  Most local authority funding comes from central government.  They could scrap council tax etc tomorrow, increase general taxation slightly in all areas to compensate and run it all off grants tomorrow.  It would be cheaper to run and higher earners would pay more.

BUT  it would make the gap between the citizen and government one step bigger because it would in effect make councils meaningless.

Whichever way you do it - Poll Tax, Council Tax, Rates, Local Income Tax, it will always upset a fairly large minority.

Rates had to go because the rises in property value would have made the following reassesment a massive rise.  Poll Tax was inherently unfair.  Council Tax is a bastardised hybrid of the two  and the proposal for Local Income Tax is ridiculous.  The self-employed and the rich with accountants would make a mockery of it.

One other possibility is a local sales tax similar to US states,  but the US is a lot bigger where as here it wiould be very easy to nip over the county line and shop in a cheaper area.

Personally,  as unfair as Poll Tax was,  it was probably the best of a bad bunch and just needed a bit of fine tuning.

"it is logically impossible for relative changes in the tax base to affect the average bill" - except if you mess up the revaluation like they did in Wales, by selecting the bands first.

The English revaluation would work by valuing property first, and then working out the bands so it is revenue neutral. I have yet to hear from the Daily Mail/Conservative Party nexus exactly what mystical convergence of the planets occurred on 1 April 1991 that makes property values then the only determinant of council tax forever and ever and ever amen.

Report on The Guardian today that the Lib Dems are soft-pedalling their policy of introducing a local income tax, and promoting reforms to the council tax instead. This is because the local income tax* in Scotland is looking unpopular. Interesting.

* It's nothing of the sort because it's the same across the whole of Scotland. 

The premise of this philosophy that the 'rich should pay more' is totally flawed whether you use property value as a barometer of payment 'due' or you equate it to a per capita basis on ability to pay.
The principle of each person paying their fair share for equal services must be the moral and common sensical way forward. Those that tout 'ability to pay' are often the lazy shirkers that simply don't want to pull their weight in society.
Why should 'the rich' pay more for rubbish collection, street cleaning and libraries? As it is, 'the rich' pay proportionately much more from the additional tax pounds they pay and the fact that fewer of them even use the NHS or the state education system proportionately, favouring private health care and private education instead.
Using the ethos spouted here, we should have supermarkets for 'the poor' that sell cornflakes at 10p and supermarkets for 'the rich' that sell them for a tenner. Maybe we should means test every purchase made by every person so that their percentage of disposable income is 'fair'.
I am totally kidding but you get the gist of my sarcasm I hope.....

The current system is a practical solution to a practical problem rather than the political concept of regressive taxation.

It is designed to cover two points:

1) it is relatively easy to move house.  Higher income groups could band together to force a higher proportionate tax on those left behind within ghettos or the poor or old.  It is only the difficulties of breaking ones ties to the nation that prevents mass migrations around the world to avoid higher tax rates.

2) spreading payments to the widest possible (poll tax excepted) group of people in order to impose some form of discipline upon local government.

It would be suicidal to reform the present system with the impact that it would have upon the net wealth of large swathes of society.  The only reason why it comes up is because the bunch of idiots that refer to themselves as liberal democrats can talk about it because they know they will never be in a position of power to do anything about it.

That said, I do like discussions about the underlying principles of economics which appears to be more than our MPs seem able. 

Local government in this country is a disgrace.  It is full of third-rate politicos who aren't good enough to get into parliament (quite an achievement these days), unemployables attracted by disgracefully high allowances, and usless retirees looking for something to occupy their time and supplement their pension.  99% of them don't know how to run anything competently and would be lost in a senior management job in the private sector.

Local government should be radically slimmed down, the gravy train should be taken off the tracks, and the whole thing should be paid for by central government.

You won't take my word for it, so why not go and see what The Labour Land Campaign have to say?They have long been campaigning for something that is even simpler and fairer and better than Council Tax, Local Income Tax, Poll Tax etc.  www.labourland.org

 

 

The poll tax was unfair because it took no account of ability to pay.  Local income tax sounds good, but people are harder to pin down than properties, so instances of avoidance would be greater.  The council tax is far from perfect, but your property usually bears at least a vague resemblance to your wealth.  It does, however, need amending.
I live alone and pay 75% of the tax which five working adults in the house across the road pay.  Does that seem fair?  There is a trend for young adults (especially males) to live at home longer once they become adults, and they are not making any contribution to the tax.
My suggestion is that all rates of council tax should be increased across the board by 50%.  Please wait before you assume that I have gone barking mad!  My plan would be that a single person in a property would then pay one-third of this new higher amount, that two people in a property would pay two-thirds, and that three or more adults in a property would pay the full amount.  Somebody in my position would then be paying only one-third of what the five adults across the road pay, instead of three-quarters as at present. 
The extra income received from properties with more than two adults should balance out much, if not all, of the reduced amount paid by single people.  Two in a house would be paying the same as now, since 2/3 of 150% is 100% (or it was when I was at school!).
This suggestion is far from perfect (what is?), but single people do get a raw deal and this strikes me as fairer, but then I have a vested interest!  Any thoughts on this, please?

The above proposal of course hits:
elderly retired couples.
and encourages sinle occupancy.
As such it makes no sense whatsoever when around 20% of the population is retired and the % is growing.
AND
one house with one person costs as much to heat as one house with two people.. so it does nothing to encourage and everything to discourage multiple occupancy (which save energy costs).


And once you start taling about exceptions...