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"King wrong on local income tax." says Richard Allanach

January 30, 2005 9:15 PM

Richard Allanach has dismissed Labour calculations of the level of Local Income Tax as ludicrous.

On Sunday's Politics Show MP Andy King suggested that people might end up with a local income tax of almost seven pence in the pound.

Richard Allanach has done the calculations to show this will not be the case.

The cost of local government is roughly £19 billion pounds. Against this cost we will use some £2 billion from the higher rate of tax (50p) on incomes in excess of £100,000 per annum. This means we would need to find some £17 billion to scrap Council Tax. Each penny on income tax raises roughly £4.6 billion so therefore the average rate of Council Tax would be roughly 3.75 pence.

"Local government costs money" says Richard Allanach "Whether this is raised by rates, poll tax, council tax or a local income tax people will still have to pay for local services like schools, roads and rubbish collection. The important thing about the local income tax is that it would be fairer than Council Tax because it is based on the ability to pay."