Thread by @jesstud

Treasury mooting idea of replacing council tax & stamp duty with a national property tax. Might sound on surface as if there’s a logic to it but the consequences for #localgov and local democracy would be dire. thetimes.co.uk/article/rishi-…

Council tax is a very unhappy tax- it’s regressive, linked to 1991 property values so those in lower band housing pay proportionately more than those in homes whose value has spiralled since. & it’s paid like a bill, unlike other taxes deducted at source so people notice it more.

Despite its deep flaws council tax seems politically untouchable, esp amongst Tories, as it only came about in the wake of the poll tax riots & the demise of the Thatcher Govt. Since then it’s rather been filed away in the Treasury under “things not to touch with a barge pole”.

But the other thing that has happened since 1991, apart from property prices skyrocketing especially in the SE, is that council grant funding has been cut (60p in the £) & so #localgov is increasingly dependent on council tax proportionately within their budgets to run services.

Such is the warped nature of #localgov financing in this country, that the value of homes in an area *at the end of the last century* has a direct impact on that council’s ability to care for their elderly, look after children in need & house the homeless *in this century*.

But the more unsatisfactory council tax becomes, and the more precarious the wider system of financing #localgov is, the harder it is to reform it without the whole house of cards falling in.

So to end what has become far too long a thread on #localgov finance for a Sunday- we do need to reform property taxation but also devolve more revenues linked to productive economic activity (income tax & VAT) & add sophisticated national equalisation to shore up local services.