Another day, another reckless throw of the dice (36)

As I've suggested before (bullet point 2 on this list), one of the many things that the government can do to prop up house prices is to freeze or reduce Council Tax (current revenues approx. £26 billion per annum).

A Uncle Vince said (before he was replaced by a moron):

An unfair tax is a tax that we have to pay ourselves. A 'fair' tax is one that someone else pays. That was what I was told when I stirred up a hornets' nest last week with [the 'Mansion Tax'] proposals...

Which is another way of saying that people moan about stealth taxes, but in reality, stealth taxes are far more popular than in-your-face taxes - and don't politicians just know it!

So let's see how this works in practice:

1. The current government gleefully hiked the standard rate of VAT from 17.5% to 20%, claiming that it would increase tax receipts by about £13 billion per annum (which is a bare faced lie, once you factor in all the knock-on effects). But because of decades of brainwashing that the EU-imposed VAT is a "tax on spending" and not "a tax on production" they can get away with it, and in particular because people aren't really aware of how much VAT costs them (it's about £3,500 per household per year on average).

2. Another way of increasing tax receipts by £11 billion would have been to simply hike Council Tax by 50%, which would have practically no adverse knock-on effects, economically speaking. But that would be too in-your-face and too honest, and wouldn't have helped keep the house price bubble inflated.

3. Another Big Lie of taxation is that "council tax pays for local services", but decades of brainwashing have elevated that to "fact", so the Tories have now tapped into a seam of political-gold-but-economic-shite: they are going to allow "the hard pressed homeowner" to veto Council Tax increases.

4. FFS, at least three-quarters of the money that councils spend (or waste, depending on your point of view) comes from Whitehall out of general taxation (and redistributed Business Rates). If the Tories really wanted councils to rein in spending, all it would have to do is reduce the central grants from Whitehall.

5. Further, even if VAT were a "tax on consumption" (which it isn't) and Council Tax did pay for "local services" (which it doesn't, it pays for a small part thereof), then how on earth is Council Tax not a straight payment for "consumption of local services"?

So Council Tax is not really a tax at all, it is (or should be) a straight payment for the value (assuming that the value is equal to or greater than the cost) of "local services", which is not just street-sweeping and so on but major items of expenditure like local schools and and local hospitals (and I defy you to give me an example of a school or a hospital which isn't "local").

6. And yes, of course there's plenty of waste and corruption at council level, but it pales into insignificance compared to waste and corruption at national level or EU level.