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Ministers urged to dump local income tax



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Published Date: 18 July 2008
By David Maddox
THE proposed local income tax has met with almost universal opposition from organisations across the country, and the Scottish Government should abandon it, Labour said yesterday.
The demand from Iain Gray, the party's finance spokesman, came the day before consultation on the plan to replace the council tax with a centrally-set 3p local income tax (LIT) draws to a close.

But SNP ministers are still adamant their proposal,
which they say would cut local taxation by £281 million, is popular, and they hope a deal with the Liberal Democrats may see the policy come to fruition.

In a surprise victory for the two parties, they managed to secure a vote supporting the principle of LIT, although not the SNP's specific proposal, at a meeting of the Convention of Scottish Local Authorities.

However, lined up against the tax plan are the Institute of Directors; Unison, the UK's biggest public sector union; the Scottish Trades Union Congress; the Chartered Institute of Public Finance and Accountancy; CBI Scotland; the Federation of Small Businesses; the Policy Institute; Glasgow City Council; the National Union of Students; Edinburgh Chamber of Commerce; and the Institute of Chartered Accountants.

Among their complaints about LIT are that it would mean extra bureaucracy, would drive away business and investment, and the fact it would be a central, not local, tax. Experts have also questioned its legality under EU law and the Scotland Act.

Mr Gray said: "If the word consultation means anything at all, Alex Salmond should listen to what he is being told and dump this unpopular plan to make Scotland the highest-taxed part of the UK."

But a spokesman for Mr Salmond said Labour should be ashamed for supporting the council tax, which "penalises pensioners and some of the poorest people in our society".

He added: "Labour MSPs would pay £600 more if we introduce a LIT, while four out of five households in Scotland will be better or no worse off.

"Polls show the Scottish Government's proposals for a local income tax enjoy overwhelming support, with voters from all the four main parties favouring a LIT over the council tax."

• To make your views known, go to "A Fairer Local Tax for Scotland" on page two of the consultations section of the website www.scotland.gov.uk





The full article contains 390 words and appears in The Scotsman newspaper.
Page 1 of 1

  • Last Updated: 18 July 2008 12:10 AM
  • Source: The Scotsman
  • Location: Edinburgh
 
1

AM2,

Scotland,UK 17/07/2008 22:43:27
Local income tax, at least in the form proposed by the SNP, would be a disaster.

Before the election, the SNP was warned by the Institute of Fiscal Studies that their revenue shortfall could be up to £840 million per annum.

At the time, Iain McMillan, Director of CBI Scotland, said: “It is patently obvious that the break-even point at which taxpayers start to pay more in local income tax than they currently pay in council tax is substantially lower than that claimed by the local income tax’s proponents.”

He was right. The SNP’s overblown pre-election claim that 90% of us would be better off has now been significantly watered down to “four out of five households in Scotland will be better or no worse off”.

But it gets worse. The Burt Commission also said that a LIT’s yield would be “less predictable”. One major reason for that is that most Scottish businesses are unincorporated and so payment could legally be evaded simply by forming a limited company and receiving most income as dividend rather than salary. The resultant unknown shortfall could actually endanger the funding of local services.

And what was the SNP’s response to these points? They said: “We will move towards allowing local authorities greater flexibility in setting the local income tax rate.”

In other words, we’ve been conned. The 3% would need to be a lot higher.
2

,

18/07/2008 00:13:16
Comment Removed By Administrator
Reason:
3

Vivas,

Edinburgh 18/07/2008 00:15:12
Ferking hell, not AGAIN by The Northbritishman ;-)

Is this what might be called a "single issue newspaper" ?

Edit: strike the use of the word "newspaper"
4

,

18/07/2008 00:15:34
Comment Removed By Administrator
Reason:
5

Coileach an taobh Tuath,

18/07/2008 00:15:58
90% of us would be better off has now been significantly watered down to “four out of five households in Scotland will be better or no worse off”..

"significantly watered down":

4/5 = 80%

The Whirling Dervish returns, spin baby spin

6

AM2,

Scotland,UK 18/07/2008 00:21:00
#5

How much of the 80% is "no worse off" and how much is "better off"?

The fact is that by their own admission, the SNP's pre-election claim was false.
7

subrosa,

18/07/2008 00:28:17
You know AM2 I am one of the many who doesn't think the present community charge is fair. I live on a very limited pension and have my own house (for which I've worked well over 40 years). What's wrong with paying with regard to my income? Why don't you think that's a fair way to create local tax?

Really I'm weary hearing all the negatives from you and your type. I've seen the figures, done the sums (and believe me having been schooled in the 50s and 60s they've been scrutinised well) but I can't see what's wrong with LIT in the main. Yes a few things need tweaking but that'll be done as you well know.

Pick another subject now. Your thoughts on this one are becoming boringly repetitive.
8

,

18/07/2008 00:28:46
Comment Removed By Administrator
Reason:
9

AM2,

Scotland,UK 18/07/2008 00:41:21
#7 subrosa

Many SNP supporters seem to be old-style socialists disillusioned with New Labour’s occasional willingness to deal with the modern world. The SNP spin machine, appealing to such people, uses the phrase “unfair council tax” and touts its local income tax plan as inherently “fair”.

Here’s my take on that. LIT would be less fair than council tax.

Is it “fair” that relatively wealthy people who derive a portion of their income from savings and investments would pay absolutely no local income tax on those?

Is it “fair” that a young professional couple (a police constable and a primary teacher, for example) living in a band D house could well pay more?

Is it “fair” that parents whose adult children still live with them (thereby using fewer council services than if they lived apart) would pay more?

Is it “fair” that self-employed people would have their earnings taxed in such a way that the harder they work the more local tax they pay in a personal capacity?

Is it “fair” that people could evade LIT by setting up limited companies and deriving much of their income through share dividends?

I’m not alone in thinking this way. The 2006 Local Government Finance Review said: “A local income tax might be less 'fair', its yield would be less predictable and it would place a major administrative burden on taxpayers, employers, local and central government … Property taxes are better suited for use as a local tax than income tax.”

And that’s the crux of it. Earned income is already a major part of the overall taxation mix, in the form of income tax. Investment income is another. Spending (VAT) is yet another aspect. To do away with some form of property tax is to remove a very important part of the overall tax basket – that of brick-and-mortar assets.
10

Tynietiger,

18/07/2008 00:55:46
Local Income Tax is fairer and easy to collect.
11

Coileach an taobh Tuath,

18/07/2008 00:57:35
9 AM2, Scotland,UK 18/07/2008 00:41:21

yawn

You've posted that before, got any fresh ctrl+V's for us?

Got any commentary on Glasgow City Council's submission to the consultation?

http://news.bbc.co.uk/1/hi/scotland/7465316.stm



12

Coileach an taobh Tuath,

18/07/2008 00:57:39
Asked - Would you support or oppose the introduction of a local income tax to replace the Council Tax?

Yes 46% No 22% DK 32%

Broken down by Holyrood voting intention the polling information is as follows (Y/N/DK):

Labour 40%/27%/33%
Conservative 42%/29%/29%
Lib Dem 51%/20%/29%
SNP 58%/19%/23%

The TNS system Three poll interviewed 1086 people across Scotland between the 23rd and 29th April 2008.
13

AM2,

Scotland,UK 18/07/2008 01:06:45
#7 subrosa

I want to address your point about pensioners in some detail. I’m not unsympathetic to that aspect of your post.

To set the scene, I’ll say that in general I’m not a fan of “progressive” tax systems as they serve as a disincentive to work. But pensioners (and people who for various reasons genuinely can’t work) deserve special consideration, because they’re generally not in a position to improve their financial situation.

It’s a common misconception that ability to pay corresponds to raw income. But in fact it’s *disposable* income (i.e. income minus expenditure) which defines ability to pay.

It might surprise you to learn that house value (at a fixed valuation point) correlates better to disposable income than income does. That’s another reason why LIT isn’t actually as fair as it might seem.

But when the relationship between house value and ability to pay breaks down – mainly when people are asset-rich but comparatively income-poor (as many pensioners are) – Council Tax Benefit can often fill the gap. That’s what it was designed for.

It’s a clunky system, but basically a sound one.

So the main problem with Council Tax isn’t that it’s inherently unfair, but that it was allowed to increase at a far faster rate than inflation.

For that reason, I think the Tories got it about right last year with their plan to halve council tax for all pensioners, although to better target that assistance I would have preferred to see a fixed reduction corresponding to about 50% of the band C rate applied across the board.
14

Iainbroch,

Moray 18/07/2008 01:08:40
The Onionists are not just against Independence are they? They are against any fair system of taxation! It is easy to see why comparisons btween Broonie and Thatcher are easy to make?

The argument about bricks and mortar assets is spurious - these assets can drop in value as well as rise. Also these assets can also and it is not beyond the realms of the reasonable, lose all of thier value!

Also the tax on investment income argument is equally specious, as that would just be another tax on savings, people should be rewarded for having the sense and good habit to save - not be taxed again on it?

But then the argument made is disingenuous and was not intended for any other honest purpose!
15

Legacy,

18/07/2008 01:08:52
Is it Fair:
That some one on £2,000 a Month,
will be £40.00+ Better Off Monthly under LIT
than with the Council Tax?
16

AM2,

Scotland,UK 18/07/2008 01:11:14
#11 Coileach

I've posted *bits of it* before. Ask for a refund if you're dissatisfied. ;-)

#12 Coileach

LIT is superficially appealing - I don't deny that! But I would expect those figures to have changed. The fact that so many organisations have now come out against LIT must surely mean that the public better understand the various downsides.

Anyway, enough from me. Too much, I hear you say! Goodnight!
17

Jwil,

18/07/2008 01:17:42
There is so much opposition to the LIT that they must be scared to death it will work. If they are so convinced that it will be a disaster why don't they let the SNP dig a hole for themselves?

I hope the SNP will continue to ignore the doomsayers.
18

Iainbroch,

Moray 18/07/2008 01:25:43
The organisations that have come out apparently against LIT are taking a political stance and nothing else.
How many of them actually consulted thier members on it.As a member of the FSB myself I was never consulted, so a statement was made on my behalf of which I do not approve or agree with!
I think a head should roll for that - preferably in the physical sense and not a metaphorical one!
I am not surprised that the Hootsman sinks to its usual gutter level and prints such garbage!
19

Allan(handofgod137),

18/07/2008 01:54:35
Just accept that this was another ill thought out electioneering idea from the snp, which they'll keep trotting out to deflect criticism of all the broken election promises.
20

Willie Macleod,

Wick 18/07/2008 02:30:27
What is said on these threads will make no difference in any Election or by election or referendum.

It is good to discuss and debate post your ideas and opinions.

Some think this will influence opinion in an election

No it wont It is What It is a place to talk and debate.
21

Willie Macleod,

Wick 18/07/2008 03:17:16
'53 Cont... Most posters here are commited and fixed in their belief and that will not be changed.

As I have said let us discuss talk and debate as a poster called Wee Beardie said be Witty and hard hitting but do it with respect and common decency if not to your fellow poster to your fellow planeitarian who just wants to talk
22

W Smith,

Middle East 18/07/2008 04:40:33
Tax dodger and kidddy on socialist Sean Connery will, with a smug look on his face, support the local income tax knowing full well it won't affect is personal fortune of over £80 million.

Connery doesn't bring or secure jobs to Scotland either - he's more interested in 'promoting the arts' and trying to get tax breaks for his film industry.

Thats not self interest as socialists don't do self interest - or so they would have us believe.

Pretentious git!

People like Fred Godwin will of course be hit while socialist Alex Ferguson, the Labour supporter, won't - seeing our Alex lives in England.

It was Salmond who started the we-could-be-like-Ireland routine but then he had to be pushed into cutting business rates by the Scottish Tories.

Strange.

No one had to force Salmond to hang out and protest with anti-NATO communists Lyddsey German (Stop the War Coalitin) or Kate Hudson (CND).

No one had to force Salmond to appoint UNELECTED Jihadist Osama Saeed as the man to get rid of Trident against the policy of an ELECTED government at Westminster.

With his taxation and Osama Saeed in tow Salmond's message should be "we could be a rogue nation like North Korea!!"
23

Willie Macleod,

Wick 18/07/2008 05:16:29
#55 W Smith Another poster who does not talk to fellow posters direct with decency .

Insults and derogeratery comments will not work

By the way Kate Hudson and CND and others you mentioned will continue to speak. And will not be silenenced by you or any one else
24

john z,

edinburgh 18/07/2008 05:24:12
People have really short memories. There was a time when Labour thought the council tax unfair. Now, suddenly, according to Labour, it's just dandy.

Bottom line is, if you are not filthy rich or earning a high income way above average, then Local incomce tax is good for you. The media magnets and pro -unionist extremists of Scotland are whinging about local income tax, because they know it will hand more power to Holyrood.

It is time that the people of Scotland started seeing right through the extremist unionists like Gordon Brown and Margaret Curran. These hardline unionists simply do what is good for London, whereas the SNP government do what is good for Scotland.

Time for Scotland to get rid of the hardline unionists.
25

The Tin Man,

18/07/2008 07:36:27
#57 John z

People living in massive mansions paying no LIT, with people living in decrepid council boxes paying 3% rapidly rising to at least 4.5%) extra income tax is OK, though.
26

Just_Me,

elgin ish 18/07/2008 07:38:22
I find it very strange that labour are now pro council tax, even their bedfellows (lib dems) have given up on that stance. I think its a policy that will come back and bite them.

And what about their voters, most must have some very institutionalised ways of thinking before they cannot see the inherant unfairness of council tax. Im fairly sure that labour admitted around a year ago that it would be impossible to tie it in any way to earnings.

The newly proposed LIT may not be perfect yet but it without a doubt a start. It may need future tweaking and at worst it might even fail (although I personally doubt that) but SNP will be well remembered for at least trying to make it better for everyone.

Perhaps a two teir system should be used where anyone wishing to keep paying the equivalent of the council tax can keep doing so! :)
27

,

18/07/2008 08:05:10
Comment Removed By Administrator
Reason:
28

,

18/07/2008 08:06:31
Comment Removed By Administrator
Reason:
29

Brian M,

Edinburgh 18/07/2008 08:12:47
I think that LIT (or whatever it's final name would be)would be a success.

Yes, I will be paying more in income tax, but not as much as council tax - frozen at £1500 at the moment, would have been over £1600 if Labour had their way
30

Linda,

Edinburgh 18/07/2008 08:29:13
If we accept AM2s argument.. "And that’s the crux of it. Earned income is already a major part of the overall taxation mix, in the form of income tax. Investment income is another. Spending (VAT) is yet another aspect. To do away with some form of property tax is to remove a very important part of the overall tax basket – that of brick-and-mortar assets."

Then that is a compelling reason for Independence so that the Scottish Government has full taxation powers.
31

The Tin Man,

18/07/2008 08:58:04
More Income Tax Now!

Big Increases in Income Tax over a Short Period? Yes Please!

Smaller Tax Base? Yes Please!

More Centralised Government Now!
32

The Tin Man,

18/07/2008 09:03:49
GBP 281MM equates to sacking 11,240 council employees in Scotland, earning an average of 25,000 per year. There will be no problems associated which such action, because it has all been so well thought-out.
33

The Tin Man,

18/07/2008 09:08:20
#66 solis

The poorest in society don't pay Council Tax. Everyone wants pensioners to get a better deal, but removing 20% of the populatioon from the local tax base, in an aging society is not without problems.
34

Linda,

Edinburgh 18/07/2008 09:10:18
Headline could have just as easily read 80% of population support Local Income Tax as it is fairer particularly for pensioners (who are most likely to vote) and will greatly help lower paid workers.
35

Marian,

18/07/2008 09:18:31
The deceit in the local income tax versus council tax argument rests solely with those who seek to perpetuate a regressive council tax that hits the poorest and most vulnerable hardest. The Council acts as an agent of central government for most services; education, social work, police, building control, etc with a little latitude for local views. Only planning, rubbish collection, street lighting, sports facilities and arts provision are wholly within its remit; and even then "guidance" is provided by the central authority. Roughly 80% of local councils' budgets come from central (Holyrood ) government with but 20% from the dreaded council tax. Amongst the problems with the Council Tax are: (i) too many houses in the same band within any Council make it effectively a poll tax where everyone pays the same (ii) The relief to people on low incomes is far too low and (iii) Councils cannot vary non-domestic rates - another nationalised local tax - so that any changes in expenditure are borne disproportionately by the Council Tax payers. So as "he/she who pays the piper calls the tune", we should be looking at the whole idea of Council Tax with a view to removing it completely! Surely it is much fairer to have Tax for local services determined by income and not by the notional value of a house? The Scottish National Party are proposing quite simply that the present Council tax based upon property “value” will be abolished and in its place there would be a local income tax for local authority services which would amount to adding a uniform nationwide rate of 3p on to the 20p basic rate of income tax. This would ensure for the first time that citizens would pay according to their income rather than paying based upon what kind of house they have and where they happen to live as is the case under the present Council Tax. Council tax is especially unfair on pensioners because council tax as a share of the basic state pension is continually rising. The poorest 20 per cent of
36

Marian,

18/07/2008 09:19:08
The poorest 20 per cent of pensioners pay nearly six times more in council tax than the richest 20 per cent of non-pensioners as a proportion of their income. Under local income tax, most pensioners would be better off. Pensioners who don't pay any income tax, won't pay any local income tax either. Not only would this proposed system based upon PAYE be fairer it would be far simpler and much less costly to collect than the existing bureaucratic nightmare that is required for the collection and administration of the Council Tax. I would also point out that Sir Michael Lyon in his recent report to the Government on the Council Tax in England, said that future governments should consider introducing more radical reforms such as a local income tax as a fairer method of raising taxes for local services. The Mayor of London Ken Livingstone has gone on record as stating he’d like to abolish the council tax and replace it with a local income tax, suggesting that with a 2p increase in the basic rate of income tax the Government could afford to get rid of the Council Tax on London. According to the Institute for Fiscal Studies on average in Scotland a single person earning £33,270 and below in a Band D property and families living in a Band F property with an income of £64,440 and below will be better off under the Scottish National Party local income tax proposals. You can check how the Scottish National Party proposed uniform local income tax of 3p on to the 20p basic rate of income tax would affect your personal circumstances by choosing an example via the following link http://paddington.snp.org/jthomas/savings.php
37

The Strategist,

18/07/2008 09:23:52
Someone needs to explain why it is that the views of the Institute of Directors; Unison; the STUC; the Chartered Institute of Public Finance and Accountancy; CBI Scotland; the Federation of Small Businesses; the Policy Institute; Glasgow City Council; the National Union of Students; Edinburgh Chamber of Commerce; and the Institute of Chartered Accountants are actually of any relevance.

After all, they have all presided over extremely poor levels of growth and investment in Scotland so self evidently their input isn't of much benefit.
38

AM2,

Scotland,UK 18/07/2008 09:25:44
#14 Iainbroch
#66 solis sacerdotibus

I'm struggling to understand why you feel the need to demonise those who don't agree with you. You actually seem to think that people who argue against LIT secretly agree with you that it's fairer but have malicious intent towards the less well off, pensioners etc. Such a conspiratorial attitude precludes open debate.

Iainbroch: Your point about brick-and-mortar assets fails to take into account that CT is based on a fixed valuation date. Market fluctuations have no effect.

The Tin Man: Good posts. I must learn to be more succinct!
39

Hawkeye the Noo,

18/07/2008 09:41:09
Hi AM2,

I think the real point is that no tax is popular and no form of taxation is perfect.

It is easy to pick holes in any system, and so it is with LIT.

The way I see it is simple and straightforward.

The present council tax is far too high, mysteriously so.

I say give the LIT a try and let us see if it works out a better system because, at present, the system is so drastically unfair that perhaps any alternative, no matter how flawed, would be better.

This story is also plain wrong, a propaganda piece on behalf of the Labour party.

The headline is misleading. It is an attack from the government's main opposition party, nothing more, which means that it is no closetr to the truth than little green men on the moon.
40

donald,

glasgow 18/07/2008 09:43:39
Labour Poll Tax Collecters and Warrant Sale grasses still support Local Cooncil Tax, which is not based upon the ability to pay.
41

Alan B,

18/07/2008 09:53:50
The list the scotsman comes out with are either labour ie glasgow council (how many lib dem and snp councils are against lit) and trade unions etc or organisations whose members are likely to lose out.

AM2 U complain about posters demonising you but have you actually read what you posted in #1. Lerts face it you will always look for a negative side to any story or issue with regard to the snp. Labour lie you will find an snp issue in it.

The problem with you is u say you are not politically aligned but then hold the snp to much higher standards than anyother party. The snp spin and it is a catastophe. Labour lie again or are surrounded by financial impropriety and you stay silent.

"In other words, we’ve been conned. The 3% would need to be a lot higher."
That is come rubbish. The 3% could easily be brought in as the snp plan as part of an overall tax cut. And surprise surprise that is what they are proposing.
42

Alan B,

18/07/2008 10:06:44
Is it true labour would have adopted LIT themselves as the price of a new coalition with the lib dems if they had won.

What did brown offer campbell as the price of a new coalition?

43

Miss H,

18/07/2008 10:08:48
Ah good they actually ended the first sentence with 'Labour said yesterday'.

That is progress!!!!

Of course what they SHOULD have said is THE proposed local income tax has met with almost universal opposition from organisations across the country - apart from those who don't oppose it who include COSLA - and the Scottish Government should abandon it, Labour said yesterday.


44

Miss H,

18/07/2008 10:16:03
OK AM2 has admittetd that he does not support progressive taxation. That's fine - now we all know where we stand.

Labour no longer support progressive taxation either.

So I think the dividing lines in this debate are becoming a lot clearer.
45

Miss H,

18/07/2008 10:17:53
68 I agree with that. Some pensioners are loaded. That's why it's simplest to base it on income at this point in time.
46

union member,

Glasgow 18/07/2008 10:22:59
The problem with the arguments about whether a tax is/isn't better/worse for groups of people is that they ultimately depend on the level at which it is set.

The 'con' or 'misjudgement' depending on your opinion of the government, in the SNPs "Increased Income Tax" proposal is to pretend that the 3p figure (even with the CT benefit funds) would bring in enough to fund services at their current level. All assessments accept that it won't.

This means that you EITHER need to increase the level of tax (meaning that more people will be made worse off) OR cut services - like Margaret Thatcher's Tories. The Government won't (or can't)tell us which they will do. But make no mistake - they (and it will be the government not local councils) will be responsible for one or the other.

And lets stop pretending that a Tax imposed by Holyrood and collected by Westminster has anything to do with anything 'local'.
47

Miss H,

18/07/2008 10:25:26
58 Do you want to make a small bet that the bill will include taxing investment income?

You know, it's so obvious. Labour make such a big deal out of the very small numbers of people who live on investment income not having to pay LIT, the SNP says OK we'll change that part of the proposal. Ditto with as many aspects of it as they are willing or able to change to meet objections.

People are still stuck with the mindset of very rigid politics, it's not like that any more. You saw how the SNP got its Budget through. That's the way people need to think now. It's how minority government functions.
48

union member,

Glasgow 18/07/2008 10:26:06
Miss H

Unfortunately if pensioners are 'loaded' it is unlikely that they will be receiving much of that via an 'income payment'. That is why it is unfair to base the tax on income at this point in time.
49

The Tin Man,

18/07/2008 10:28:18
#76 Alan B

Tax-cuts are always welcome, except among those at the bottom of the ladder, who depend on government spending.

There is no such thing as a free lunch, even with meals-on-wheels. What is the Plan for the spending-cuts associated with the proposed 280MM pound tax-cut?
50

Miss H,

18/07/2008 10:29:12
81 The SNP has never at any stage said that a 3p LIT will bring in as much income as is generated by council tax.

It won't.

Because it is a tax CUT targeted to benefit low to middle income families - the people being hit by fuel and price rises now and who have been penalised by Labour's tax hike for the low paid.

51

BIG EYE,

Paisley 18/07/2008 10:31:14
The Institute of Public Finance who are quoted as being opposed to LIT are the body whose members currently adminster the Council Tax. Hardly surprising they are against it when it means their current jobs would no longer be needed in such numbers.

The FSB view must be the view of an individual or a handful of individual. As previous posters have pointed out the membership were no contacted on this matter. I am a member and was not consulted.

The Labour Party are against. Major surprise there then and that explains the daily coverage in the Hootsman!

Whose going to buy your newspaper if you keep annoying your readers?

What will last longer the Hootsman or the Council Tax?
52

The Tin Man,

18/07/2008 10:34:17
#71 Marian

"Under local income tax, most pensioners would be better off."

I think what you meant to say is that almost all pensioners will pay nothing at all.
53

Hawkeye the Noo,

18/07/2008 10:36:33
Ha!

I came across this quote in by Tom Miers, executive director of the Policy Institute, who said in relation to LIT that it would be “the greatest blunder since devolution”.

Come again? Devolution has been braw but nowhere near enough the economic freedom we require to make our country function at its fullest potential. What is this guy on about?

But, hey, I think we get it now. The people complaining about LIT are crackpot fat cats obsessed with looking after their own interests and nobody else's.

And if these people are the ones whinging, then we know the SNP have got it right.

Introduce LIT now!
54

AM2,

Scotland,UK 18/07/2008 10:58:04
#79 Miss H

The word “progressive” gets bandied about in this debate, often by people who seemingly don’t know what it actually means but who think it sounds positive.

You say that I have “admitted” that I don’t tend to favour progressive taxation. But “admitted” is a weasel word, intended to give the impression that there’s something shameful in my position or that I was previously attempting to conceal some ulterior motive – neither of which is true.

It would be helpful if we could conduct this debate without certain of LIT’s proponents trying to portray those who disagree with them as morally inferior.

But moving on, the SNP evidently doesn’t favour truly “progressive” taxation either. Local Income Tax isn’t progressive.

Rather, it’s a “proportional” tax, as it’s in direct proportion to its base, i.e. taxable income. I can only suggest that you check the definitions if you’ve been using these words in some vague sense.
55

AM2,

Scotland,UK 18/07/2008 10:59:49
#76 Alan B

Not so. I would be no less opposed if the LibDems were in the driving seat.
56

AM2,

Scotland,UK 18/07/2008 11:04:38
#82 Miss H

If they taxed investment income, pensions and other such funds would be affected in a similar way to Gordon Brown’s scrapping of tax relief on share dividends, leaving them open to the very same accusation that they themselves levelled at Brown - that of “raiding” pension funds!

There’s no way to square that particular circle.
57

The Tin Man,

18/07/2008 11:06:54
Anyone in favour of abolishing VAT and bundling it onto income tax?
58

The Tin Man,

18/07/2008 11:09:53
#85 Miss H

Where is the plan for the resulting cut-backs?
59

Scottish 'N British,

18/07/2008 11:15:20
90

The Lib Dems can at least show their LIT is local.
60

Just_Me,

18/07/2008 11:21:01
This debate really boils down to whether you believe the current community taxation should:

a. remain based as it currently is on the biggest asset you are likely to buy/rent in your lifetime.

or

b. be based on your income.

Changeing to b. would also help out people renting as they wouldnt get the council tax passed on from the house that their landlord can afford!
61

The Tin Man,

18/07/2008 11:22:01
Who will be removed from the local tax base by abolishing personal property taxes and increasing PAYE income tax?

- Almost all retired persons.
- The very wealthy
- Anyone with a business (eg plumbers, shop-keepers) will have an oppertunity to minimise LIT payments.

This situation would then be paid-for by everyone else.

But at least we would not get an invoice through the door for CT - other taxes are much less obvious.
62

AM2,

Scotland,UK 18/07/2008 11:23:12
#95 Scottish 'N British

Fair point.
63

Scottish 'N British,

18/07/2008 12:19:58
66

Pedantry = desperation
64

Ken_Fitlike,

18/07/2008 12:28:37
13 AM2, Scotland,UK 18/07/2008 01:06:45

Council Tax Benefit, you are the weakest link - Goodbye

Up to two million pensioners in the UK are missing out on Council Tax Benefit which could cut their bill by £540 a year. Council Tax Benefit is still the most unclaimed benefit of all - with pensioners losing out on up to £1.1 billion each year.

According to the Liberal Democrats in 2006/2007, upwards of 170,000 Scottish Pensioners currently fail to claim means-tested benefits to which they are entitled to.

The vast majority of older people in Scotland continue to live in their own homes. Figures for the 2002 Scottish House Condition Survey show that 30% of households in Scotland are pensioner households. Good quality housing is a fundamental requirement for quality of life and the home is of particular importance to older people.

Just because a benefit is there doesn't mean that people are claiming it or indeed benefits from it, Browns' subsidy junkie system makes a fool of proud people who have worked all their lives and deserve to live as independently as possible.

Assuming a typical Band C Home in Scotland and a pension of £15k annual, a pensioner is paying out nearly 6% of their gross income on council tax, under LIT they'd be paying around 1% based on their ability to pay......

For very poor pensioners on say the state pension only, they will pay the same and there is an argument to abolish Scottish Water charges for this group, cost would be somewhere in the region of £18-24million annually approx.

Let's not forget the acceleration of free heating and insulation installations that the SNP are delivering, which are cutting fuel bills by up to 50%.


While much of the publicity & poss above centres round pensioners the CTB system actually hits working families the hardest. Many low paid workers have to pay full Council Tax.

Just under half the children living in poverty live in households not entitled to CTB.

LIT would also scrap
65

Ken_Fitlike,

18/07/2008 12:28:54
cont'd

LIT would also scrap the mad subsidy currently enjoyed by second home owners

Councils will be able to tax these properties with their own rates, making more revenue.

Under labour, the rich with second homes received a 50% council tax discount until 2006, when it was changed to a 10% discount.

A system where the poor are subsidising rich people to own second homes?
66

Miss H,

18/07/2008 12:32:01
58 That is precisely why the SNP’s proposal excludes such income. However if the majority opinion is that investment income should be taxed then so be it.
67

Miss H,

18/07/2008 13:08:32
56 Agreed AM2 the SNP’s local income tax is not as progressive as income tax for example because it is set at a flat rate. But it is more progressive than council tax. Council tax is a regressive tax - no-one disputes that.

I'll put my cards on the table as well. Is the SNP's proposal perfect? No of course it isn't. It is to a large extent a sticking plaster solution to the problem of council tax.

If we were starting from a position of having full control of the tax and benefits system I am quite sure that this is not the system of local taxation we would design. We would look to have a more integrated system which was could indeed include some kind of property based taxation as well as other forms of taxation and which would allow for variation.

But we are not in that position and as a unionist you do not want us to be. As long as we are in this position therefore we have to work within the constraints that exist while arguing that those constraints are rather stupid and pointless.

68

The Tin Man,

18/07/2008 14:18:20
#71 Miss H

Personally, I would agree that a mixture of income-tax and property tax would be a more balanced solution to the problems with the CT system. Not understanding why such a system would be currently imposible, though.
69

The Tin Man,

18/07/2008 14:21:24
..The deathly silence from the SNP activists on the cuts that would be made associated with a 3% LIT rate is noted...
70

Upbeat,

18/07/2008 15:42:37
And when it has become obvious that 3% of Scottish earnings, (sliced off from the income of those who are not in some disadvantaged group or other ) is not adequate to pay for Council services at the present level, what then ?

Are we gong to see Holyrood stump up the balancing figure ? Are we going to see Westminster cadjoled into reinventing some from of block grant to subsidise Scottish councils ? ( They have said this would never occur )Or are we going to see the SNP sponsoring wholesale cuts in council services, centralising some, or doing away with others altogether, because this is what Scottish people wanted them to do ?

The truth is you cannot make a large purse from a "sows ear" . The SNP hope that the people of Scotland will be beguiled by the thought that a whole lot of them will somehow become better off with LIT. They won't be. Its a con..... and if Alex Salmond and his crew do not spend time listening to all the organisations that have been trying to point the truth out to him, then the SNP will cause the biggest underfunding ever seen in Local authorities across Scotland.

Winning the argument for Scotland ? ...I don't think so.
71

,

18/07/2008 17:02:16
Comment Removed By Administrator
Reason:
72

Jock Tamson,

Scotland, Caledonia, Alba 18/07/2008 18:41:08
See the duty AMtwa registered a post at 22:43:27 last night. At least was more sober than the previous night's duty AMtwa.

And what time did Friday's edition go online?

Note the paper version has a wee photae of yon Gray chappie with the quote about Salmond listening to what he's being told.

What we are not being told is how investment income is taxable at source, or by tax return, but is uncollectable at local level or through the existing system.

I also believe the Institute on Charterd Accountants (Scotland) - nice to have your name in brackets as a norm? - would be willing to work with the Government on the subject.

Does it not mean then that all those representing public funded bodies are the ones who are running scared?

73

Jock Tamson,

Scotland, Caledonia, Alba 18/07/2008 18:48:16
Something else has occurred to me which might be worth investigating no chance with this newspaper - is why, if we're all on a national database, state payouts are not yet automatic?

They know what you earn. They know when you travel. They probably know the time of day you go for your daily dump.
74

Jock Tamson,

Scotland, Caledonia, Alba 18/07/2008 18:55:05
And talking of my daily dump, I would like to know why there are so many mistakes in the Scotsman crosswords these days.

If it's not missing or wrong numbered clues it's compilers who cannot even get the words in the clues right to pose anagrams.

75

daveserviceman,

edinburgh 18/07/2008 23:07:59
Dont forget people though LIT sounds good it is against EU law to impose it The Scottish government would have to take this up with the European Parliament who now control these things
76

daveserviceman,

edinburgh 18/07/2008 23:22:56
Marion #38
Ken Livingston is not the Mayor of London he has been replaced for sometime now by Boris the Spider Johnson

 

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