Independent experts give green light to Lib Dems' Local Income Tax
March 3, 2005 3:57 PM
Charles Kennedy and the Liberal Democrats have been collecting signatures against the unfair Council Tax for many years.
Councillor Barry Dodd has welcomed further independent support for Liberal Democrats' proposals for Local Income Tax to replace Council Tax. He said, "All of our claims have been confirmed by another very detailed study. We support those people who have been made very angry by Council Tax. The shocking fact is that for some people, Council Tax swallows up a quarter of their small incomes, whilst the well off pay just a small proportion of theirs in Council Tax. It is an extremely unfair tax.
"The independent study shows that, if council Tax were scrapped and replaced with Local Income Tax, seven people out of ten would be the same or better off and only the highest paid would have to pay more. In detail the study shows that:
- Local Income Tax is workable
- The rate necessary to replace Council Tax with Local Income Tax would be less than 4p in the pound
- A pensioner couple on about £14,500 income would save £1,100 a year
- A single teacher on £22,000 would save more than £600 a year
- An average household with two earners would save £500 a year
- Only 3 out of 10 people would pay more but these would be the highest earners
- A Cabinet Minister on £130,000 a year would pay about £2,000 a year more
- Replacement of council Tax with Local Income Tax, set by councils but collected by the Inland Revenue, would save around £300 millions a year in collection costs
"The Institute of Fiscal Studies is a highly respected research organisation," says Cllr Dodd. "It is a tremendous boost for our proposals to have them independently verified in this way. What we need now is for the Government to take action soon to reform this unfair tax before the imminent revaluation of Council Tax bands, makes it even more unacceptable."
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