Council tax is unfair to older people, renters and those on low incomes. Here are the reasons why I will be voting to freeze Wandsworth’s council tax this year:
1. Council Tax hits the poorest hardest
The multi-billionaire Warren Buffet once noted that while he paid 17.7 per cent of his income in taxes, his receptionist was unfairly asked to contribute 30 per cent.
Council tax has a similar ‘regressive’ impact. Wandsworth’s Band D council tax is almost 5 per cent of after-tax income for Peter, a security guard who lives in Latchmere, the ward I represent. For his near-neighbour Rakesh, a solicitor, it is much less than 1 per cent of his income. Hundreds of my constituents have told me that they enjoy Wandsworth’s low council tax. I know some who simply couldn’t afford to pay more.
2. Council tax only funds 5% of Wandsworth’s budget – so increasing it would not raise much money
In the financial year 2013/14, Wandsworth council budgeted to spend over £900 million. It raised only £45 million of this through council tax.
The maximum increase without a local referendum for Wandsworth in 2014/15 would be 2 per cent, or £900,000. If the council increased tax by the maximum allowed it would only raise enough money to cover 0.1pc of its annual budget. Or to put it another way, enough money to run the council for another 8 hours.
While Wandsworth raises £45m a year from council tax, parking charges raise £29 million.
The serious taxes still go to central government: last year Wandsworth residents paid an astonishing £121m in stamp duty (plus of course many hundreds of million in income taxes).
3. Council tax assumes that because you have a nice house you are rich
Many older people on low, fixed incomes have been unfairly caught in this trap. Helen lives in the family home near Wandsworth Common that she has occupied since the 1970s. A graphic designer, she has never earned more than £20,000 in a year, but now faces a council tax bill the same size as her multi-millionaire neighbours.