Thursday, March 31, 2005

Local Income Tax

Even if a local income tax was a good idea, and it isn't, will different parishes, towns or counties be able to charge different tax rates?
Will people move from one area to another to take advantage of lower rates?
What happens if you move across a "border" half way through the year or your income changes during the year?
Will areas offer discounts to attract higher earners?
Will the Inland Revenue be able to cope with a myriad of new local tax rates changing on an annual basis adding to the complexity of an already struggling tax system?
Who will prevent local expenditure from rising ever higher as those using local services the most will have the least chance of paying for them?
Will rich local authorities continue to see their taxes allocated to "needier areas"?
Have the Liberal Democrats thought about the actual mechanics of their idea?

If the rate is uniform across the country then it hardly strikes me as being a local income tax. It will just be another tax on the successful and responsible to pay for the workshy and irresponsible.

I assume pensioners in large houses will no longer feel obliged to downsize as they are no longer charged a tax on occupancy. How will new families therefore be able to purchase their family houses or will it stoke house price inflation again?

Update Should council staff responsible for council tax collection be worried about their jobs if the Liberal Democrats win power? Or will they retained whilst the Inland Revenue recruits more staff to deal with their growing remit?

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