I am not a politician or economist, nor am I some great thinker of our age. I am just a normal man, single, living in rented accommodation, in a well-paid job, for my part of the world. Yet I still have to rent out my second bedroom to afford normal things like the internet, satellite TV and the occasional visit to a good restaurant. I have to pay out £830 a month just for my Council Tax, rent, petrol and energy before I even eat, let alone pay for the internet or satellite TV!
Here in Cornwall, the average gross earnings for a full-time worker are £20,982. As any normal person knows, that is a lot more than the majority earn for a full-time job. I would suggest, based on the online job sites, that anything north of £15K for full-time work is considered a good job here. This county relies heavily on part-time work, anyway.
So, I ask a simple question.
Why do the Government persist in taxing people on the value of their home?
The value of the family home cannot accurately determine the wealth of a family or individual, as it is perfectly possible for a family to live in a relatively high-valued property and still be cash poor. Why is it not possible to move to a tax system for local government that is rooted in a person’s ability to pay?
Two options out there, which to my mind are perfectly workable if the political will is there, are:
PAYE—a local element to our income tax (with the appropriate tax element for people who have to declare their earnings).
Purchase tax – local authorities levying a percentage on what we buy with the usual exemption for food etc.
My Council tax bill was over £1300 for 2012/13, on a property with a value currently of approx. £100k. In my building we have a single mum who works and and gets a 25% reduction, but has half my household income. How does that work? She has no other income, other than child allowance. We also have a guy who works in I.T., owns his flat and earns more than my household and the single mum put together, yet pays the same as my household in council tax! How can that be fair? Can anyone please explain to me in simple terms the justification for our Council Tax system?
If the government wants to earn money from people who buy expensive property then they should do it when they purchase the property and when they sell it. Or is that too simple?
* William Townsend is a Liberal Democrat member in Cornwall.