It's Time To Axe The Tax!
February 4, 2004 12:00 AM
By Sarah Teather MP in North West London Newspapers Times/Chronicle Series
By Sarah Teather MP in North West London Newspapers Times/Chronicle Series
Sarah Teather is campaigning to Axe the Tax
Council Tax is now the most unpopular tax in Britain. I believe it is time to axe this unfair tax and replace it with a fair system, based on people's ability to pay.
The Council Tax was introduced by the Conservatives and made worse by Labour. Since 1997, the average Council Tax Bill has gone up by more than £455 a year, a rise of 70%. It is no wonder protest groups are springing up all over Britain demanding fair local taxation. In every part of London this unfair tax is hurting people on low and medium incomes. Even the independent Audit Commission, which monitors Government departments, has described it as 'fundamentally flawed'.
The problem with Council Tax is that it takes no account of people's ability to pay. So a pensioner couple, living on a meagre income, can pay as much in Council Tax as a high earning professional couple. The poorest 20% of pensioners pay nearly 6 times more than the richest 20% of non-pensioners, as a proportion of their income.
It's a question of fairness. Tony Blair earns £175,414, his wife earns much more. He lives at Number 11 Downing Street, which is in council tax band H. On this property he pays £1,140 a year in Council Tax. Only O.6% of what Mr Blair earns goes on paying council tax! Contrast this to a pensioner living in Brent who earns say £12,500 a year through combining his pension and some other savings. If they lived in a band D property in Brent their Council Tax bill would be £1075. That's 8.6% of their income. A pensioner in Brent pays 13 times as much of their income in Council tax as Tony Blair does!
Lib Dems believe that whoever a person is, if they have more income, they should make a larger contribution. Students should pay nothing unless they earn a lot at the same time. Poorer pensioners should pay nothing, whereas those with larger private incomes should make a fair contribution.
If Lib Dems were in Government we would axe the Council tax and replace it with a local income tax. Many other countries as diverse as America and Sweden use a local income tax system. This system would be based on a person's ability to pay and would significantly lower the level of taxation placed on many pensioners.
You can learn more on the campaign to 'Axe the Tax' at http://www.axethetax.org.uk
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