Council Tax and Business Rates should go
The system of raising money to pay for local government spending is antiquated, unfair and widely acknowledged to be in desperate need of reform.
Governments have tinkered with the system, introduced the ‘poll tax’, the community charge and more recently Council Tax which is based on relatively arbitrary valuation of property and takes little account of the reality of people’s ability to pay. It is inequitable.
For years, politicians have been decrying the lack of interest in local elections. Yet in many places the elected representatives are roundly condemned year round for spending anything meaningful. Politicians are forced to find any avenue for raising revenue rather than raise the rate of Council Tax.
It has long been a maxim that there should be ‘no taxation without representation’.
The way local authorities are currently funded operates against that principle. See how local tax works.
The bulk of local authority income comes at the political whim of the Government in the form of grants. While there will always be a case for some extras coming from central funds, this should be an exception rather than the norm.
Raise money locally
This website puts the case that by raising all of local government revenue through a local VAT would:
- make a closer connection between electors and the elected
- remove the dependency of local authorities on grants from the government
- mean that tourists and visitors pay equitably for the services and infrastructure they use
Interesting facts
The total income from nationally charged VAT is almost exactly the same as the total spent by all local authorities.
In Devon, for example, one eighth of the population at any one time, on average, is visitor.
In Devon, tourists spend nearly £2 billion pounds a year - of which nearly £200 million pounds is VAT which goes straight to central government.
