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The regressiveness of council tax undermines local accountability because the effective costs of paying the tax varies greatly according to the income of the taxpayer. Large disparities in income are not reflected in the amount of local tax paid. The banding system places a very low ceiling on the amount of council tax paid by the rich and at the same times sets a high minimum level on the amount of tax paid by the poorest members of society. Regardless of how rich a person is they currently pay on average about £2,878 compared with around £959 paid by those on low incomes, a ratio of only three to one. (Based on average 2010 - 2011 council tax rates.) Wealthy people can easily afford to pay council tax without having to accept a reduction in their standard of living. But those who are less well off may be finding it difficult to make ends meet, and their tax bills make life harder for them. They may be reluctant to vote for increased local spending even if they are in favour of improved services. The rich on the other hand can vote for increases in tax without having to accept a lowering in their standard of living. This reduces accountability for decisions. It has been suggested that business rates should be returned to local control but this is also regressive. Accountability is best achieved by progressive taxation where the amount people are taxed is commensurate with their ability to pay.













Council Tax Benefits Charges Rates Bands Exemptions

Copyright (2007)