It's time to Axe Council Tax

8.11.20am BST (GMT +0100) Thu 7th Apr 2005

Hard working families and pensioners pay a higher share of their income in tax than the very rich. People on a fixed income (like many pensioners) are particularly hard hit by big tax rises.

No Council Tax bills

The Liberal Democrats will abolish the Council Tax and replace it with a Local Income Tax.

Who pays?

If you do not pay national income tax now, you will not pay any local income tax either.

Easier to understand

It is easy to collect. Local income tax will be collected through the existing PAYE system. The 20 page Council Tax Benefit form would go. This would save £600 million collection costs.

Who gains?

The Institute of Fiscal Studies confirmed that half of householders would be better off, a quarter would be unaffected, and one quarter would pay more.

How do we pay for it?

Lib Dems would also introduce a top rate of 50% national Income Tax for those people earning over £100,000. We would use this money to keep local income tax rates low.