One thing that I found about England is that they have a tolerance for some pretty high taxes. Maybe they feel it’s necessary to provide for their national health care system, but I found it pretty hard to swallow. I’ve highlighted a few of the taxes that gave me the most heartburn below:
Television TAX:
In England, you have to pay an annual fee to own a television. This fee doesn’t get you all the cable you can watch, nor does it cover the cost of the tv. This tax simply funds the BBC, and a few other things, I’m guessing. The tax is somewhere around 120 pounds a year. With an exchange rate of 1.8, that equals roughly $216 per year, just to own a TV. Now you’d think that people could just not claim they have a television and avoid the tax, but that’s not the case. Here’s a quote from a site that discusses the tax:
“Using a television without an appropriate licence is a criminal offence. Every day we catch an average of 1,200 people using a TV without a licence. There is no valid excuse for using a television and not having a TV Licence, but some people still try – sometimes with the most ridiculous stories ever heard. Our detection equipment will track down your TV. The fact that our enquiry officers are now so well equipped with the latest technology means that there is virtually no way to avoid detection.”
— from the official website of the British Television Licensing Authority, May 2003
Apparently they have a way to track you down and they’ll fine the heck out of you if you don’t pay it. Ugh!
Congestion Tax:
This is a relatively new tax and is in use in two cities in England currently, including London. The goal of this tax is to lighten up the amount of traffic that’s on the London streets during peak times during the week. The current charge is 8 pounds per day to drive a car AT ALL on the streets in London’s core. Once you drive in to the zone, a camera takes a picture of your license plate. You have until midnight to pay the tax, or you are also fined 50 pounds for lack of payment. My quick observation was that this results in only the rich people being able to drive in to the city. If you already live in the city, you just have to avoid driving your car during the weekdays. Not exactly convenient.
VAT tax:
This tax rate is currently 17.5% on most things you buy. Computers, electronics, services etc. And I thought that 8.5% sales tax was bad. YIKES.
These are just a few of my least favorite taxes that the citizens have to pay. I’m not sure I could live like that. Their salaries aren’t higher so that they can afford all of these taxes, so they really have to watch their spending to cover it all. There’s no question that all these taxes have had an impact on people’s spending patterns. People live in smaller houses, use less energy, buy fewer things and make things last longer than most people in the US. Needless to say, when I returned to my home, it felt like I had just rolled up to a castle. Our house is 2700 square feet and feels cavernous, compared to where we stayed for two weeks. I like the extra space, but I definitely realize I don’t need this much space.