A thinktank has called for the ‘highly regressive’ Council Tax to be replaced by a ‘progressive’ levy on property.
The Resolution Foundation, a progressive organisation, has accused the Council Tax of being outdated and, similar to the Poll Tax which it replaced, almost flat-rated in certain areas.
The foundation’s report said that the Government should look to either reforms or outright replacement of the present system, before it started to fuel public resentment.
One of the report’s suggestions for reform was to follow the lead of Scotland, which introduced higher Council Tax rates for the top four bands, pulling in an additional £1 billion for the Treasury.
Further reform, as part of a more comprehensive overhaul, was proposed, which would see a 0.5 per cent charge levied on all properties, leading to increases, some quite substantial, based upon a property’s current value.
Council Tax is currently divided into eight bands, all of which are based on 1991 property prices.
Commenting on the present system, the principal researcher at the Resolution Foundation, Laura Gardiner, said: “Despite replacing the unpopular poll tax, Council Tax has come to look increasingly like it. It’s time we looked to abolish it.
“Someone living in a property worth £100,000 pays around five times as much council tax relative to property value as someone living in a property worth £1 million. This is exactly the kind of result that opponents of the poll tax wanted to avoid and in stark contrast to income tax, which increases with incomes in a progressive way.”
Of course, these are only the proposals and opinions of a thinktank, with there being no suggestion that any of it will be acted upon or sway current policy.
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