Reforming the Council Tax in Wales: good luck to them

Apparently the Welsh are intending to ‘reform’ the Council Tax.  Of the 3 options under consideration, one is feeble: simple revaluing all properties.  The 2nd changes the weighting within the 9 existing bands: lower weighting at the lower end, higher at the higher (i.e. slightly more progressive).  The 3rd is the most ‘radical’: move to 12 bands, also with a weighting shift.

To me, this third option is a real no-brainer and one Osborne should have done in that brief 2010 window when he could have done almost anything he chose and, quite appropriately, his slogan was “all in it together“.  Clearly, from his deeds of commission and omission, he never meant that; and the opportunity was lost. 

I’d go further: extend the number of bands almost indefinitely.  We all know the Council Tax is a wealth tax, so anyone who proposes to have palpitations at the very thought of such a thing, can emigrate now on principle.  Ditto progressive taxation.  All these things are matters of degree.  Gratuitous regressivity is nothing to be proud of.

I am sure there are some complexities over estates of such massive dimensions that any proportionate Council Tax would be likely to wipe them out in cash-flow terms (as happened with the first efforts at Estate Duty more than a century ago, under governments a lot less liberal than any post-war government).  OK, then – just 20 bands.  The point remains the same: the current system is ludicrous (hey, it was thrown together by Michael Heseltine on the back of an envelope one weekend!): defensible in only the most weaselly terms.  As are many existing schemes when you look at the detail and the consequences, of course – that’s life, that’s politics.  No need to stay with them when there are easy fixes, though.  

It will be interesting to see how this goes for the Welsh.

ND