'Hit super-rich to cut council tax'
Updated on 24 January 2008
Increasing the amount of income tax paid by the super-rich could pay for widespread council tax cuts for ordinary families, a think tank has said.
The New Local Government Network (NLGN) is calling for an additional income tax band of 10% to be created for people earning more than £200,000 a year.
It said the extra revenue generated by this could be used to fund reductions in council tax, saving the average person in a band D property around £205 a year.
The group said the move was "crucial" to take the pressure off council tax bills and enable urgent reforms to be carried out to the system without penalising households.
These reforms include abolishing council tax as we know it and renaming it as the local property levy, as well as carrying out a revaluation of properties in England.
It said under its proposed reforms this revaluation could be done without increasing the tax bill for any households.
The NLGN said once the revaluation had been carried out, property prices could then be tracked on an annual basis to ensure that the levels at which the levy is charged remained fair and consistent. It said local authorities would also be given new fiscal autonomy, including the ability to introduce local variations to the current banding rules.
This would enable councils to set the number of property bands they had, as well as the range of property values covered by each band and the difference between the tax rates paid by each band.
The group would also like to see an end to the Government's right to impose a cap on council tax increases that councils can call for.
Council tax is currently Britain's most unpopular tax, with 67% of people saying they think it is unfair.
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