Council Tax Abolition?

Regressive

The report states “Council Tax is broadly regressive, producing a relatively high burden on lower income households (particularly those on or just beyond the margins of Council Tax Benefit)”. This comment is an admission that the Council Tax is bad news for low income households and the Council Tax benefit system does not soften the blow. Indeed the weakness of the Council Tax Benefit system is further re-enforced by the comment that “Council Tax Benefit take-up may not be maximised owing to the complexity of the forms.” Some of us have been telling the Government this for years.

The burden of the Council Tax on low income households is made even clearer in the report by the fact that when people obtain Working Tax Credit or Child Tax Credit they usually lose entitlement to Council Tax Benefit. So for some of the most vulnerable in our society while they may gain on the one hand from the system in Tax Credits they end up losing Council Tax Benefit. It brings a new meaning to give with the one hand and take away with the other.

It’s not often that the Government is so forthright in its criticism of its own policy but this report explains all that is wrong with the Council Tax. It is unfair, problematic to collect, a severe burden on low income households and largely punishes those who are just above the threshold for obtaining Council Tax Benefit.

Local Income Tax

This report has been a great boost to efforts to abolish the Council Tax. I think the system will only be made fair when we have a system of local income tax based on the ability to pay, reflecting the circumstances of every individual in our society. That system will be easy and efficient to collect, will save money that can be invested in services and remove a burden that is punishing those who are on low or fixed incomes. The sooner we abolish the Council Tax the better.

John Swinney is SNP Member of the Scottish Parliament for North Tayside