Public Choice Perspectives on the Poll Tax
The Community Charge which was introduced to England and Wales on I April I990 is part of a reform of local government finance with the avowed intention of enhancing local accountability by creating a direct link between local expenditure, local taxation and local voting. This paper applies public choice theories to evaluate both the economics of its introduction and the responses of the public to the Charge in its initial months. Section II reviews the main public choice rationale for the Community Charge and relates accountability to efficient resource allocation. Section III examines evidence on voter awareness and fiscal illusion in order to consider whether the replacement of domestic rates by this tax will increase local accountability. The stance taken in Sections II and III is one in which the Conservative government is privy to the messages of public choice theory and acts as if to further the 'public interest' by eliciting the 'correct' responses to slay the local government Leviathan.' However, any government may have interests other than, and divergent with, those of the public and this will introduce distortions even in the implementation of public choice prescriptions. This point is developed in Section IV to offer one explanation of the recent history of the Community Charge.