The FT possible inadvertently trots out some Homey propaganda:
Council tax has overtaken credit cards as the most common debt problem in Britain, highlighting the strain on family budgets from years of stagnant incomes.
Citizens Advice, which has more than 3,000 centres around the country, said there had been a notable shift in problems away from consumer credit on discretionary items and towards basic household bills.
It expects to deal with 191,400 cases of council tax debt in 2014-15, up 20 per cent on the previous year.
The Homeys extrapolate from this to LVT and make outrageous claims about Council Tax being "the single biggest bill facing families" and LVT being regressive or unaffordable.
Nope.
The problem is in the way it is collected.
Leaving any other tax or welfare reform aside, council tax is barely one-seventh as much as PAYE deducted from wages at source. That's why very few individuals rack up "PAYE arrears". The point is that PAYE is withheld at source - you don't get the opportunity to get into arrears.
But if you are strapped for cash, it is tempting to delay paying £100 a month in Council Tax and given the trivial amounts involved, councils don't always chase up if people are a few months overdue.
Thought experiment: what if the tables were turned:
a) Council Tax were deducted at source from wages (or pensions or indeed other welfare payments) that would be no more than £250 a month in Band H (or Band I in Wales) and very few people would even notice the difference, and
b) People received their wages gross and were asked to self-assess their PAYE and pay it over in monthly instalments, then PAYE arrears would go through the roof.
That way lies madness.
(But what if Council Tax were collected at source (by adjusting people's PAYE codes, for example, all perfectly do-able)? That would make it much easier to transition to higher but more progressive land value taxation with a corresponding reduction in income tax and National Insurance.)
Debate Magazine
