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The Reform of Local Taxation in the United Kingdom in the Light of The Balance of Funding Review Report

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  • John Fender

Abstract

Currently, local authorities in the UK raise only about a quarter of their revenues from taxes under their control. The Balance of Funding Review Report considered whether this proportion should be increased, and if so, how. This paper considers the report and possible reforms. Reasons why the balance of funding is a problem are discussed. However, there are problems with the current system apart from the balance of funding, and to solve some of these a closer link between council tax bills and property values is suggested. Whether a local income tax should be introduced as a supplement to a reformed council tax, and other possible reforms, are also discussed.

Suggested Citation

  • John Fender, 2005. "The Reform of Local Taxation in the United Kingdom in the Light of The Balance of Funding Review Report," Discussion Papers 05-03, Department of Economics, University of Birmingham.
    • Handle: RePEc:bir:birmec:05-03
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    2. Olson, Mancur, Jr, 1969. "The Principle of "Fiscal Equivalence": The Division of Responsibilities among Different Levels of Government," American Economic Review, American Economic Association, vol. 59(2), pages 479-487, May.
    3. Mr. Richard Miller Bird, 1999. "Rethinking Subnational Taxes: A New Look At Tax Assignment," IMF Working Papers 1999/165, International Monetary Fund.
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    Keywords

    Balance of funding; property tax; business rates; local income tax;
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