Euro MP support for alternative to Council Tax (Diana Wallis MEP)

Diana Wallis MEP <info@dianawallismep.org.uk>

Euro MP support for alternative to Council Tax

January 14, 2004 12:00 AM

Local Lib Dem Euro MP, Diana Wallis, has given her support to her Party's alternative to replace the unfair Council Tax.

A new Local Income Tax, set at an average of 3.75p would be levied to replace Council Tax. Based on people's real ability to pay, the move would mean tax cuts for millions of pensioners and ordinary families.

The Liberal Democrat MEP said: "Council Tax is the most unpopular, unfair tax in Britain today and is set to be the biggest issue in June's local elections in Yorkshire and the Humber. The Audit Commission has called the Council Tax system 'fundamentally flawed'. It is deeply regressive - a pensioner can pay as much as a cabinet minister."

"Local Income Tax is a fair, efficient, tried and tested method of local taxation. It is already used in many other countries around the world and works very well. Most importantly it is directly related to the ability to pay. Our plans for LIT will be a huge advance for most people - 70 % will pay less or be unaffected.

"If the Government is serious about 'new localism' it has to sort out the mess of local government finance, and end councils' reliance on such an unfair tax. A local income tax works in countries as diverse as the USA and Sweden; we believe it can work here."

Ms. Wallis added: "Britain's poorest 10% pay four times more of their income in council tax than the richest 10%. For pensioners, the poorest 20% pay nearly six times more of their income than the richest 20% non-pensioners."

"In a country where the average household income is around £21,700, a local income tax based on the ability to pay, is the only fair means of raising revenue. By using the existing income tax system, we can save at least £300 million on bureaucracy alone. And local income tax doesn't need a costly benefit system - it has fairness built in."

The Liberal Democrats Local Income Tax plans include:

1. A tax free personal allowance of at least £5,000 on implementation

2. No rise in the overall tax burden

3. A cap on income subject to local income tax at £100,000

4. Using the Inland Revenue to assess and collect local income tax

5. Estimated savings of over £300 million a year on bureaucracy