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The potential impact of reforms to the essential parameters of the council tax

Author

Listed:
  • Colin Jones
  • Chris Leishman
  • Allison M. Orr

Abstract

Council tax was introduced in Britain in 1993 and represents a unique international property tax. There is a growing belief that it is time to reform the number and structure of council tax bands, but such views have a minimal empirical base. This paper sets out to assess the impact of changing the bands on personal and local government finances, and extends the analysis to the role of the tax multipliers linked to each band. The research is based on the experience of a representative sample of local authorities in Scotland. A statistical revaluation for 2000 is estimated for the existing eight-band system, and from this base a 10-band system is calculated. Financial implications are then simulated for each local authority, taking account of central resource equalisation mechanisms. The results indicate that increases in the number of bands will have little impact on the burden of the council tax compared with regular revaluations. Changing the tax multiplier range has the greatest impact on local authority finances and council tax payments.

Suggested Citation

  • Colin Jones & Chris Leishman & Allison M. Orr, 2006. "The potential impact of reforms to the essential parameters of the council tax," Fiscal Studies, Institute for Fiscal Studies, vol. 27(2), pages 205-229, June.
    • Handle: RePEc:ifs:fistud:v:27:y:2006:i:2:p:205-229
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    Citations

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    Cited by:

    1. Rajiv Prabhakar, 2016. "How did the Welsh government manage to reform council tax in 2005?," Public Money & Management, Taylor & Francis Journals, vol. 36(6), pages 417-424, September.
    2. Mayor, Karen & Lyons, Seán & Tol, Richard S. J., 2010. "Designing a property tax without property values: Analysis in the case of Ireland," Papers WP352, Economic and Social Research Institute (ESRI).
    3. Rhys Davies & Michael Orton & Derek Bosworth, 2007. "Local Taxation and the Relationship between Incomes and Property Values," Environment and Planning C, , vol. 25(5), pages 756-772, October.

    More about this item

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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