Lewes Forum thread

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The Axe (continued)

On 11 Jun 2010 at 9:43am sashimi wrote:
EBM, you asked why I assume people in large houses can afford to pay higher rates of council tax. Well, councils collect 98.5% of the tax due to them, so in practice they do. The differential also acts as a small incentive to downsize when you no longer need to live in a large family home, particularly if you are short of funds.
Mystic Mog, local income tax is based on the PAYE system, so it would ignore unearned income and very wealthy people would either pay less than their fair share or escape it altogether. Also, you ignored the issue of Kensington raising more with a 1p tax than Sunderland. If there isn't an adjustment between rich and poor authorities, poor places will have to charge more to provide basic services than rich places. If there is an adjustment, the system is just as complicated and unsatisfactory as the present one so why upset everyone by changing it?
On 11 Jun 2010 at 10:12am 'ere be monsters wrote:
I think you are merely saying "They've got a big house let them pay more council tax". I'm asking if that is fair. As the council do not collect 100% of council tax then there are those that cannot afford it, perhaps some of those are ones in large houses!
On 11 Jun 2010 at 10:52am sashimi wrote:
EBM, I think the council tax that isn't collected is from people who rent and have gone bust or legged it. 98.5% is as near to max as you can get. I suppose I am saying if you've got a big house, you should pay more. You will also have bigger bills for upkeep. If you can afford to stay on, good luck to you. But eventually we all downsize to a box. Some of us get there in stages and others do it in one leap. Consider the case of Phil and Liz whose four children have now grown up and gone off to live elsewhere. Do they still need a 653 room house in central London? Now they are in their 80s perhaps they should retire to their holiday home in Scotland?
On 11 Jun 2010 at 11:19am jrsussex wrote:
There is an assumption being made here that all people with large houses are better off than those with small houses. People may purchase larger properties for a variety of reasons. They may simply prefer to live in surroundings because they have special hobbies, artists wanting a studio for example or they may work from home and need office space or simply that they prefer the additional space and are willing to stretch their financial resourses to achieve that desire.
It may be because they have thrre children or more and require the extra bedrooms and generally when buying a 3/4 bedroom property there are 2/3 reception rooms. None of that means they are not struggling just as hard as those with smaller homes to pay the mortgage. There are those who invest all or most of their income in ensuring they have a home that suits them whilst others prefer to live in a smaller home with a smaller mortgage but enjoy good holidays, a nice car etc. Nothing wrong with either attitude. I know a couple who strugggled for 10/15 years to purchase what to them was their dream come true. Large house with the land for them to keep chickens and have a large vegetable plot as well as a garden. Not for me but I admire them for it. Anybody assuming they were rich is way off target.
Finally you will find that as you work your way up in life with your disposable income increasing year on year generally speaking your standard of living keeps up with that so with regards any cash assets you're no better off. For those who think that wrong I would say, what would be the point of working hard to earn money if you don't enjoy it in whatever way suits you and your family.
On 12 Jun 2010 at 10:38am 'ere be monsters wrote:
Retire to their 652 room home in Scotland, downsized?
People working from home should be charged business rates.
On 12 Jun 2010 at 5:25pm Annette Curtin-Twitcher wrote:
People may prefer to live in large houses for all sorts of reasons, but if they can't afford the council tax on a big house, they can downsize and pocket the difference in value as well as save on running costs.
I think it is an entirely fair reflection of people's relative wealth, as most people's biggest asset is their home. My only objection is that the bands don't really go high enough at the top end. Someone in a big detached house in Wallands is probably not paying much less than the residents of Firle Place.
Sashimi's right - a local income tax would fall hardest on PAYE wage slaves and the scrupulously honest, the scumbags who evade tax now would evade a local tax too. A property-based tax is easier to administer and collect - houses don't move and accountants can't convince the taxing authority that they're worth much less than they are.
On 13 Jun 2010 at 8:40am capital-but-no-cash wrote:
Just because a tax is easier to collect doesn't make it fair. I was left some money when my parents died and bought a nice house. This used up all the inheritance and I am no better off at all - but it will be a nice legacy for my kids. House are capital, but the tax is paid out of income - which bears no relation to capital - so how can that be fair? VAT is indiscriminate and penalises the poor. Well administered income tax is the only way to go.
On 13 Jun 2010 at 11:37am sashimi wrote:
Capital-but-no-cash, of course you are a lot better off - and infinitely better off than your brother, No-capital-and-no-cash. You have a better house to live in and no extra mortgage to pay. As well as having a larger asset to sell if you have to downsize, you have the increase in its value. The point about houses is that they are always in short supply and no one owns them for ever. A larger house tends to have more occupants and generates greater costs for the community. If you choose to live more comfortably, you should pay the full cost of doing so.
On 13 Jun 2010 at 1:38pm 'ere be monsters wrote:
Sashimi, "A larger house tends to have more occupants". That's a poor argument to charge those that have only a couple.
On 13 Jun 2010 at 6:19pm sashimi wrote:
EBM, either a larger house uses more services for which the household should be charged - or if it is under occupied, there should be an incentive for the present occupant to downsize and pass it on to someone who needs it more. This is not an imposition on the little old lady who continues to live in the family hmse: it is a continuation of the charge she has paid before. The incentive (less council tax and a cash rebate from exchanging for a less expensive property) does not imply any compulsion.
On 13 Jun 2010 at 6:20pm Annette Curtin-Twitcher wrote:
If you have a house bigger than you need, or posher, or with a lot of land, you can raise cash by selling it. When you live in a modest or bottom-of-the-market house, you don't have that option.
A tax that is easier to collect is less costly to collect and less likely to be evaded. Why should everyone pay more for local tax collection which will only benefit the property-rich and tax avoiders/evaders?
On 13 Jun 2010 at 6:55pm 'ere be monsters wrote:
I worked very hard for our house, so I get penalised for hard work? Whatever!
On 13 Jun 2010 at 7:06pm SHS wrote:
Catching up on this thread, don't agree at all with the last comments ACT. Jrsussex makes many of the points I need to make. Does it never occur to some people that those with a large house have usually worked very hard for it, making big sacrifices and savings? Income is taxed, so why have double, treble or more taxation to punish hard work? (Think stamp duty, council tax, tax on taking in a lodger or renting out a garage etc). Some people prefer to spend money down the pub, eating out, on holidays, even gambling. Some people will never work more than a 40 hour week and will never study or train to improve their prospects - this isn't a bad thing (could probably be a good thing), just a choice that is made. But then don't criticise or try to penalise those that have made a different choice and as a result may have assets such as a big house, car or land. Moving on, if you tax income or company profits, both on a sliding scale, you should be giving an incentive to work but also taking away more money when clearly the individual or company is making a lot of money. If you tax an asset, such as a house, you give a kick in the teeth to someone who has worked hard and disregard the current ability to earn or pay - an individual or company may have fallen on hard times and anyway has already paid enough tax earning the income to pay for the asset.
On 14 Jun 2010 at 4:59pm Annette Curtin-Twitcher wrote:
But many people have worked very hard and never earned much money, because they have worked in jopbs that are poorly rewarded, but nevertheless essential. Why should they have to pay more because those with big houses want to pay less?
On 16 Jun 2010 at 10:28pm SHS wrote:
I agree that this happens, a lot (teachers, nurses, compare with non-essential bankers). However tax based on income should take care of this if structured properly and council tax should be kept to the bare minimum, affordable by all and preferably reduced from current levels.

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