Saturday, February 21, 2015

The Unfairness of Council Tax!

Britain you have shocked me again. Since until now I have been a student living in University owned student accommodation I haven't had to worry about Council Tax. But now that I face the prospect of having to pay it I decided to look it up. Here are the figures for Oxford:

Parish/Area Band A
(£)
Band B
(£)
Band C
(£)
Band D
(£)
Band E
(£)
Band F(£) Band G(£) Band H(£)
Blackbird Leys 1,093.23 1,275.42 1,457.62 1,639.83 2,004.24 2,368.65 2,733.06 3,279.66
Littlemore 1,108.12 1,292.78 1,477.47 1,662.16 2,031.54 2,400.90 2,770.28 3,324.32
Old Marston 1,114.12 1,299.78 1,485.47 1,671.16 2,042.54 2,413.90 2,785.28 3,342.32
Risinghurst and Sandhills 1,105.98 1,290.29 1,474.62 1,658.95 2,027.61 2,396.26 2,764.93 3,317.90
Rest of the city - unparished areas 1,096.48 1,279.20 1,461.95 1,644.70 2,010.20 2,375.68 2,741.18 3,289.40

By itself this is pretty meaningless, it is a discrete graduated tax where the highest band pays triple the lowest band as long as the highest band is houses worth roughly triple the amount of those in the lowest band this is a decent approximation of simple X% tax (though note that income is generally tax using a progressive tax such that the most wealthy pay a higher proportion of tax). So let's check the bands (from Council Website):

Value at 1st April 1991 Band
up to £40,000 A
£40,001 to £52,000 B
£52,001 to £68,000 C
£68,001 to £88,000 D
£88,001 to £120,000 E
£120,001 to £160,000 F
£160,001 to £320,000 G
£320,001 and above H

 Well now we see that the highest band is actually >6X more valuable than the lowest band, thus the Council tax represents at least 2.75% the value of a band A house (in 1991) but less than 1% the value of a band H house (in 1991), thus it is actually a regressive tax.

But the last bit of information we need to actually understand the situation is the proportion of houses in each category (from the National Statistics website):



Band Percentage of dwellings (2011) Tax rate (on 1991 property value)
A 3.74 >2,75%
B 15.32 2.47%-3.22%
C 31.82 2.16%-2.83%
D 26.54 1.88%-2.43%
E 11.51 1.69%-2.30%
F 4.72 1.26%-1.99%
G 5.38 0.86%-1.72%
H 0.97 <1%


 Look at that, the 89% living in the cheapest properties are paying 175%-50% more than the top 1%. And people wonder why wealth is being concentrated among the wealthiest in society.