Local taxation

In your November edition you asked for workable alternatives to Council Tax.

Local authorities may be financed wholly from national taxation and distributed by central government, or wholly or in part by local taxation. There are many objections to the former but that is no reason for excluding it from a general review of the financing of local expenditure.

Local taxation may be based on charging local residents:

a          per capita, as for the poll tax ;

b          according to property values;

c          according to assets;

d          according to income;

e          according to expenditure;

f           two or more of the above, in combination.

Any of the above could be applied with or without exemptions and/or alleviations.

a          seems now to be out of the question politically;

b          is likely still to be unfair, and a burden to many, whatever modifications might be applied to the rating system;

c          would be difficult and expensive to apply, and would penalise the prudent;

d           is fair, in principle, but would also be difficult and expensive to apply (because residents of any particular locality are dealt with by Inland Revenue offices all over UK); also, there is the problem of undeclared income;

e          is equally fair in principle and, I consider, would be so in practice; administrative costs would be very low since the local sales tax would simply be included in the VAT for the area; residents would be paying according to their spending, which would be fair and under their own control; there would be no 'dodgers';

f           this would depend on which forms were selected, but all but (e) seem to have fundamental disadvantages and why introduce unnecessary complication?

Considering all the possibilities, I think that a local sales tax is by far the best of them. However, its application should be studied in detail in advance, which should include sending a team to the States to study its operation in those States which use it. It would of, course, mean a one-off jump in apparent inflation but, though we would be paying more for our purchases, we would (on average) save an equal amount from the abolition of direct local taxation.

George Onion, Birchington

More readers views on solving the thorny issue of Council tax are welcome.