Council Tax - Criticism

Criticism

Council Tax is criticised for perceived unfairness in not taking into account the ability to pay (see regressive taxation). These critics point out that while the capital value of the property in which a person lives might give some indication of the relative wealth of the individual, it does not necessarily relate to current income. Council-tax advocates respond that those on low incomes can apply for council tax benefits which can significantly (or totally) reduce the amount the applicant pays. This argument presumes, of course, that the system of council tax benefit is itself a satisfactory scheme. In particular, not everyone who is eligible to benefit will make a claim.

Critics also claim that Council Tax has a disproportionate impact on renters, or those occupying part-owned social housing. They are paying tax according to the value of a property that they may not have been able to afford to buy or even rent at market rate.

Equally, the tax isn't actually particularly proportionate even to property values. A band H property will pay at most three times as a band A, even though the value of the property may be ten or more times higher.

Whilst the tax may have regressive characteristics, supporters point out that there is a significant means tested benefit regime in place which offers rebates to those on low incomes. This has the effect of making the tax less regressive. Furthermore, in comparison to its predecessor - the Community Charge - council tax is straightforward to collect with in year collection rates averaging 97% in England.

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