Local government funding should be changed from property and land owning (rates) base to an electoral roll based levy.
Phil Caton
Public
Seen by 171
At the moment, although everyone in the local territorial authority can vote if they are on the electoral roll, only property or land owners actually directly pay the council levy (rates). That is, if a person rents property or land there is no direct taxation (although the levy will certainly be added to the rent, but not necessarily identified as a 'rates payment').
As New Zealand becomes increasingly urbanised, so there are more people living in rental accommodation who do not receive rates bills and therefore do not perceive themselves as being directly taxed.
So if a person is not directly affected by the council tax, why would that person have any interest in voting in council elections?
Does this explain the low voter turn-out at local elections?
I suggest that, to increase public interest in local spending issues, the revenue collection is based on the local electoral roll, not on the ownership of land and property.
I would also suggest that it is not the property or the land that 'consumes' council provided amenities, but the people in the council's district that 'consume' council provided amenities, whether it be use of roads, sanitation, potable water, libraries, parks or playing fields.
Similarly, this proposed method of revenue raising would remove the controversial imposition of tax on Maori land. The owners on the electoral roll are taxed, not the land or property.
Note that a levy would still apply to commercial buildings.
Note also that the levy change may require enforcement of registration on the electoral roll.
Katharine Moody Wed 20 Aug 2014 11:00AM
Nick's points are valid. What you are suggesting is a poll-tax - effectively a flat tax (a regressive tax) whereas rates are (to a degree) a progressive tax (i.e., a tax on wealth - the greater the wealth the higher the tax). Although, that said, within the rating toolkit there are some 'flat tax' rating tools (e.g., UAGCs - uniform annual general charges).
But most importantly, Nick makes the point the benefits of local infrastructure that accrue to land holders - which is why land tax is indeed the most equitable taxation model.
But I take your point about the poor turnout in LG elections. Taxation however is not the way to improve that.
Christine McCartney Wed 20 Aug 2014 11:03AM
Agree With Nick Taylor all the way. That would be a serious deal breaker,absolutely not you are talking about a poll tax.. Thatcherism UK 1989. also USA http://www.u-s-history.com/pages/h425.html
Colin England Wed 20 Aug 2014 8:44PM
What's being proposed would be a major cash windfall for the landowners.
Ross Scholes Wed 20 Aug 2014 8:53PM
This is called a 'poll' tax. It caused riots when Thatcher tried to intorduce it in Britain ... http://en.wikipedia.org/wiki/Poll_Tax_Riots
Colin Davies Thu 21 Aug 2014 11:13AM
While I understand your rational.
I agree with Nick's arguments, but I think he missed a few.
This would in effect I see as being a double tax on the poor.
However if this was coupled with rent control I would consider it.
Colin Davies Thu 21 Aug 2014 11:23AM
@philcaton
Similarly, this proposed method of revenue raising would remove the controversial imposition of tax on Maori land.
What is not well known about many of the Maori Land problems with rating is that there are actually many Sovereignty issues still with this.
Question: Why should Maori land owners be paying rates on land that they have no access to due to appropriation by either the Crown or Councils?
The maori land courts are full of these cases and the Justice department is taking decades to schedule the proceedings.
I realize this is something most non Maoris have no idea of. And the only media coverage is about the councils complaining that they can't collect the rates.
Note: In some cases this issue is about ownership and others it is indeed sovereignty.
Virginia Toy Thu 21 Aug 2014 7:20PM
I feel like this seems overly simplistic, but won't this just inspire people not to register on their local electoral role in order to avoid rates payments?
Colin Davies Fri 22 Aug 2014 1:07AM
@virginiatoy
While the electoral Comission doesn't run the local body elections, it is in fact responsible for maintain the rolls.
So basically the same data is used for local rolls, general rolls and maori rolls. I think this is a commonsense approach rather than some other places where it is separate.
Anyhow it is illegal to not be enrolled. But this is hardly ever enforced. If from age 18 you keep a low profile you will probably never caught. You might get caught if you change address once enrolled and don't have your details updated.
Virginia Toy Fri 22 Aug 2014 8:14PM
Yes, its illegal not to enroll but I am sure that people would still not enroll if doing so would cost them money!! Thus this policy would just promote people not to be enrolled. A different way of linking rates to actually dwelling on the property is needed I think.
Nick Taylor · Wed 20 Aug 2014 10:09AM
Nope. We need to do the opposite.
Tax land, not labour or economic activity - we should remove income tax and GST, and ONLY tax unearned income - the root of which is land-ownership.
If the taxpayer builds local infrastructure, then local land-owners get a free-ride in the shape of land-value increases. I've seen calculations (London based admittedly) that show that land-owners don't effectively pay tax at all, because the rate at which public investment in infrastructure increases the value of their property is greater than the amount they pay in tax, total.
Winston Churchill had this to say on the subject: http://www.progress.org/banneker/chur.html
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People aren't "uninterested" in local elections etc because they don't pay rates, they're uninterested because they're as boring as hell.
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The poll-tax in the UK is/was an atrocity - cost thatcher her throne, and caused mass rioting - I know, I was there. I think The Peasants revolt in the middle ages (Watt Tyler?) was also a reaction against poll-taxes.
There's a serious shit-storm headed this way over the "property market"... expect violence. Don't exacerbate it by trying to introduce a poll-tax FFS.