I find myself intrigued by the ideas of affordability and proportionality. Under the Income Tax regime, if I earn more then I pay more tax. I may not like paying the tax, but it kinda feels proportionate. The fact that there are some allowances and offsets help support the view that the system is fair, or that at least some safeguards have been built in to protect people.
Likewise the Capital Taxes regime. There are allowances, and if I make a small capital gain on the disposal of an investment I will pay less tax than if I make a whopping profit. Again, there is that sense of proportionality, so one shrugs one’s shoulders and writes the cheque.
Given those parameters, I don’t quibble about paying tax, and I’ve never felt inclined to opt-in to schemes in order to avoid paying it, even though I am generally skeptical about a political culture which is so utterly dependent upon leveraging ‘other people’s money’. I gave up tracking the sheer levels of waste and lunacy within public institutions years ago, as it led inexorably to a pessimism about the future of the human race.
The Welsh Government’s manipulation of the Council Tax regime is quite a different matter. It makes not even a gesture in the direction of proportionality. It takes absolutely no account of the ability of the taxpayer to afford the overhead. It includes no provisions or counterbalances to ease the tax-burden. There is apparently no provision for individual circumstances, something one might expect within a civilised, democratic society.
In short, what it appears to do is take an ideological shortcut to solving a perceived problem: there is a shortage of affordable properties for local inhabitants; you own one of those properties and don’t live there permanently; therefore we are going to penalise you. There is, within this kind of rubric, no explicitly disclosed, properly-constructed operational plan which demonstrates how penalising one category of individual is going to directly benefit another category of individual. On this point, there seems to be a lot of handwaving going on when it comes to justification. Apparently, one should be quite content to endure this egregious regime, because, in some magical way, there will be ‘social benefit’.
We’ve heard this kind of sentiment before, and it is a questionable one at best. I’ll write about that in a future piece: Pembrokeshire County Council have past form in this area which does not exactly build confidence. Let us for the moment, content ourselves with the implications for this tax imposition upon individuals selected for the privilege, simply based upon a particular characteristic of their status: ‘second-home ownership’.
The mere fact of owning a second property may obscure a wide range of underlying explanations. The well-heeled outsider, the property-developer or holiday-letter who builds a significant business proposition around a large-scale acquisition strategy, is one kind of influence. The small scale individual who pours years of effort and their (post-tax) life’s savings into a small home for personal and family use is quite another. The property we bought was a run-down hovel on the side of a hill, and could easily have been acquired by any local who wanted it. It had been on the market for twelve years.
These significant distinctions between individuals who fall into the category of ‘second-home owners’ seem to be too important to have been so obviously ignored by our political leaders, don’t they? The mere fact doesn’t translate through to being so outrageously wealthy that one therefore deserves any kind of tax penalty that the faceless bureaucrats decide to impose. The Welsh Government might, with about as much logic and consistency, impose swingeing additional taxes on part of the population because they are white (because such individuals are privileged) , or because they own more than one bicycle (in some parts of the world, owning one bicycle means you are wealthy). Because the mere fact basis for increased taxation takes no account of circumstances, and because it builds in no allowances or checks and balances, we may safely conclude that it is a tool of oppression. If there were ‘social goods’ that could (genuinely) be achieved by raising taxation then, in a democratic society, we’d all be paying our way, via the usual systems which involve checks and balances. But no, this particular ‘windfall tax’ doesn’t even presuppose a ‘windfall’ of some description, which might at least provide some evidence of an ability to pay.
For the record, we now spend 32% of our net income on Council Tax. Next year, it will be over 40%.