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Bills, bills, bills

Brian Taylor | 11:16 UK time, Wednesday, 3 September 2008

It was a confident performance by the first minister. I know, I know, such a statement is tautologous. But worth pointing out nonetheless.

Ranged against him, the opposition leaders. All three hopefuls for the Labour post sat on their party's front bench, an eager and aspirational triumvirate.

It fell to Cathy Jamieson, the current acting boss, to speak. And she spoke rather well: pointed and precise.

The new Liberal Democrat leader, Tavish Scott, offered the opinion that the programme for government was light on measures to address the economy. A substantive point, well delivered.

However, it allowed the first minister to point out, gently, that he had dealt with the economy as his very first point, that he was doing what he could within limited powers - and that he would welcome support from Mr Scott for extending those powers.

I doubt he will be as gentle again.

The Conservatives, breaking with custom elsewhere, fielded the same leader as they had had on show before the recess.

Surviving summer

Annabel Goldie duly lambasted the government's proposal to ban off-sales for those aged under 21 as daft - and was equally excoriating about the move to ban the council tax.

Mr Salmond voiced his relief that at least one opposition leader had survived the summer. It encouraged him, he said, in the thought that there was durability still in political life.

To the substance, then. It is often difficult, in truth, to discern a theme from such legislative packages.

They are disparate, blending politically engendered proposals with reform measures which may have been waiting in the wings for some time.

However, if one were seeking a theme, one might look towards lifestyle. Building perhaps on the ban on smoking in public places, introduced by the previous coalition team, there is proposed action on tobacco advertising at point of sale and, controversially, plans to place constraints on alcohol off sales.

Kenny Macaskill and Nicola Sturgeon are notably evangelistic about this latter effort. But I believe they will also blend this with pragmatism.

This will face huge opposition: from the trade, from political rivals - and from groups like students who don't fancy being prevented from buying drink in an off licence before they're 21.

Party challenge

I wouldn't be entirely surprised if some elements of this package fall from the picture, either at the present consultation stage or at the later legislative stage.

But, for now, they're in. This is the Governmental intention.

Same might be said of the plan to scrap the council tax and replace it with a local income tax - although there the intent is firmer still.

In essence, Alex Salmond and his ministers are saying: these are our plans. Don't like them? So what have you got as an alternative?

To the Treasury, who say LIT would mean Scotland losing £400m in council tax benefit, the SNP is issuing a comparable challenge.

It's the genteel political equivalent of "come and have a go if you think you're hard enough".

The Tories oppose LIT. So do Labour - although, under pressure, the leadership contenders have been obliged to go further than their 2007 manifesto, acknowledging wider flaws in the council tax.

The LibDems ostensibly support LIT - but don't like the SNP's plan for a fixed 3p rate across Scotland.

Modern lifestyle

It may be income tax, say they, but it sure ain't local.

Will LIT get through, precisely as Mr Salmond proposes? Doubt it. However, it seems likely that a reformed system of local government finance will emerge, somehow.

Other stuff. The Creative Scotland Bill, bumped by MSPs for lacking financial detail, is back in a new guise. Bit like one of those telly shows, repackaged in a new format to win audience support.

This time round, it's contained with a wider public services reform bill. That should obviate the need for a six month delay before the measure is reintroduced. But there may yet be further oppositionm party objections.

Lots on the environment: marine conservation, climate change etc. See that modern lifestyle theme.

Lots on criminal justice: reforming the sentencing procedure and the system of justice itself.

In fact, lots.

Comments

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  • 1. At 11:36am on 03 Sep 2008, JR wrote:

    Not sure you meant to suggest that students would be in the business of buying drink in off-sales BEFORE they were 18. That couldn't happen anywhere, could it?

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  • 2. At 11:37am on 03 Sep 2008, Older than the Pyramids wrote:

    At last, real politics is back.

    No real surprises in the proposed legislative programme, which is no bad thing - indeed, one might question the value of a minority administration trying to push through with other than central policies without having first tested the water to ascertain the likely level of support elsewhere in the chamber.

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  • 3. At 11:56am on 03 Sep 2008, Aberdeenbill wrote:

    Why are the SNP so keen on LIT and yet they were so opposed to POLL Tax. In my eyes they are both the same? Surely a family of 4 all living at home and working will be worse of under LIT than council tax? Get a life Mr Salmond, or are you not aware that it is getting more difficult to afford one these days?

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  • 4. At 12:01pm on 03 Sep 2008, JDM112 wrote:

    I'm confused. has a coalition been form. Why have the Lib's shuffled up to the SNP and left the Conservative all by them self out in the corner. Very weird.

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  • 5. At 12:12pm on 03 Sep 2008, forfar-loon wrote:

    "The Conservatives, breaking with custom elsewhere, fielded the same leader as they had had on show before the recess."
    ...
    "Mr Salmond voiced his relief that at least one opposition leader had survived the summer."


    You and Eck have the makings of a double act there Brian!

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  • 6. At 12:20pm on 03 Sep 2008, U11769947 wrote:

    Has AS lost his confidence? a some-what unconvincing preformance to say the least.


    The clock is ticking, will the nats fold under this pressure?????

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  • 7. At 12:29pm on 03 Sep 2008, Dunroamin wrote:

    Still vehemently against the LIT. The unemployed will no longer contribute to local services at all, as with our sizeable sickie community and as with the wealthy with non-salary income.

    While those with two-incomes or more per household will pay more.

    Plus the SNP's proposed 3p increase in income tax does not cover all the revenue raised by CT which means money has to be diverted from other budgets.

    Plus it ends any fiscal automony held by councils, instead putting all financial power in the hands of the SNP (how ironic that they plead for more fiscal freedom while denying it to others).

    Why not amend the existing Council Tax? Add in more bands perhaps?
    This has not even been debated by the SNP.

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  • 8. At 12:30pm on 03 Sep 2008, minuend wrote:

    Once again Alex Salmond demonstrates how ineffectual the Unionist opposition are, be it in the political chamber or in the press gallery.

    Scotland is not being best served by poor Labour, LibDems and Tory MSPs, and a very poor fourth estate.

    Perhaps we require a nationalist opposition to a nationalist government to get the best out of the Scottish parliament.

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  • 9. At 12:31pm on 03 Sep 2008, Richard_the_Rogue wrote:

    #3 Aberdeenbill

    In your eyes LIT and the poll tax are both the same?

    No, they are not. The poll tax (and council tax) take little account of ability to pay. A family of four, all working, will be able to afford to pay more tax, effectively subsidising those in society who are, for whatever reason, on low incomes, just as normal income tax does now. In short, it's fairer.

    A few years ago, I was on a low income and struggled to pay council tax. I also suffered under the iniquitous joint and several liability rule. Now that I am earning a good deal more, I would be happy to pay that little bit more, if it means others (like my elderly mother, for instance) pay less.

    My only issue with LIT is that those in our society who earn the most will to some extent be able to avoid paying their fair share, as they do already with normal income tax.

    As for it being not local, I agree, and I think it would be better to introduce it initially at a fixed national rate if that makes implementation easier, then bring in variability after a year or two.

    I strongly object to the false arguments put forward by certain Labour politicians against LIT, and frankly it's enough to ensure they never get my vote in future.

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  • 10. At 12:54pm on 03 Sep 2008, regmitchell wrote:

    Whoops - mistakenly put this on yesterday's blether!

    Question - Won't the proposed "local" (i.e. Scottish-wide) income tax require active and continual co-operation from:

    a). All banks having branches in the UK (some of whom might not have branches, nor even offices, within Scotland).

    b). Numerous UK employers (ditto above).

    c). HMRC.

    Suppose any of the above politely tell Scottish councils to do the other thing? Could the Scottish government legislate that for instance, a Korean bank branch in London should disclose details of its Scottish account holders?

    If it's truly going to be a 'local' tax, then surely this will place an untenable burden on our council authorities' resources to execute cost-effective collections. Look at the number of people who should, but don't, even pay their council tax. And now we're contemplating actually trying to establish their incomes?! It costs enough trying to get payment when we already know where they live, let alone what they earn as well! I can see this becoming another case of the honest ones that pay subsidising those that won't.

    Further, particularly in this age, folk change their jobs a darn sight more often than they move house. I can see an ever-growing bureaucratic machine being required here. And guess what? The amount of tax required will ONLY increase, if nothing else, then just to pay for the increasing number of tax collectors....! As usual, the devil's in the detail.

    I speak as one who has an average salary (derived from a London-headquartered employer) paid in Scotland, but also a separate investment portfolio. The proceeds from both are paid into English bank accounts, and are of course declared to HMRC.

    I can see I'll end up paying income tax twice on the same UK earnings. Or do I have to become a neighbour of Mr Connery's?



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  • 11. At 12:54pm on 03 Sep 2008, rabbiehippo wrote:

    Dont know what all the fuss is about being under 21 to buy alcohol in off licences. Asda and Tesco already have signs up stating that unless you look over 25 you will be asked for id. In fact my wife was refused in Asda once and shes 31 this year (but of course she loved that). If it wasnt for young folk abusing the situation this bill wouldnt be necessary. When i was in my teens we used to buy booze illegally but the difference is that we would go to the park and sit and yap for hours then just go home. Unfortunately as ive seen for myself ...kids just get pished in the street and run around fighting each other and smashing window etc.
    Oh you can blame the police, but most rural police stations are not manned at night. In Huntly if your stupid enough to get arrested the police have to take you to Inverurie for the night. Also from experience ive seen the police being set upon by gangs of drunks, so i can see how joining the police might not be to attractive. One of my bike riding buddies who is a police sargaent told me once that when he was stationed in Keith...they had to patrol Newmill (small village near Keith) and on a Saturday night would have to be out of there by 10 as it was like the wild west !!
    At the end of the day people will get used to the fact and it will just be the norm...that is if the other parties back it which i doubt they will.... well maybe the tories.

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  • 12. At 1:00pm on 03 Sep 2008, Older than the Pyramids wrote:

    #7, Reluctant-Expat

    "Still vehemently against the LIT. The unemployed will no longer contribute to local services at all"

    To be honest, I hadn't thought about that aspect before.

    It is currently the case that such individuals are required to pay a small proportion of the normal Council Tax liability; given that benefit payment levels are the same wherever you live in the country, some claimants will clearly be better off at the moment if they live in an area with a lower Council Tax.

    Any introduction of a national Local Income Tax - which would affect all claimants identically - must surely be associated with a reduction in the level of benefit payments. Again, there will be gainers (e.g. Glasgow) and losers (e.g. Angus) is this is done on a purely averaging-out basis.

    I know that, in an ideal world, we wouldn't be starting from the current position but it must be a positive step to move to a system (LIT) which carries the principal benefits [no pun intended] of being more realistically related to the ability to pay and the virtual elimination of avoidance.

    The LibDems' opposition is perverse; even if they don't approve of the SNP proposition, it will be far easier to modify that [to their preferred option] at some point in the future, than to sustain the current system indefinitely until 'meltdown' necessitates a hurried and ill-considered change - as when the Community Charge was ushered in to replace the rating system.

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  • 13. At 1:08pm on 03 Sep 2008, marcus_mcgarvey wrote:

    What a hypocrite Salmond is. He warns other MSPs that will be damned by the public if they reject this bill yet the SNP voted down the same proposals when it was presented to parliament by Tommy Sheridan.

    Tommys bill to scrap the council tax was amendable so that the SNP could have voted for the bill to scrap the tax with an amendment replacing Tommy's 'service tax' with their plans for LIT.

    The SNP decided that they couldnt support Tommy's bill as collecting nationally through PAYE meant that it wasnt a local tax!

    Now they come back with the same idea and say that anyone who doesnt support it will be letting down the public?

    By Salmond's own standards SNP MSPs should be ashamed for refusing to vote to scrap the council tax in the previous parliament.

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  • 14. At 1:08pm on 03 Sep 2008, David Boothroyd wrote:

    This isn't a 'local' income tax; it's the same rate in Lerwick as it is in Stranraer, and those two places are not local to each other. 3p extra on income tax does not cover what the council tax brings in.

    Reluctant Expat is right to say that it ends all financial autonomy for local councils.

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  • 15. At 1:22pm on 03 Sep 2008, A_Scottish_Voice wrote:

    Some people seem to be having some difficulty understanding the simplicity of LIT.

    Let me help, its a fairer system and it's going to happen. End of.

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  • 16. At 1:25pm on 03 Sep 2008, Simon_Brooke wrote:

    I really don't understand people who oppose local income tax. It's obviously the fairest tax, and, given the mechanism to collect it is already established, also the cheapest to collect.

    Of course, Reg Mitchell, local councils will not set up their own administrations for collecting income tax. Of course employers are not going to have to set up a separate system to pay it. You will fill in one - just one - tax return. HMRC will collect one - just one - payment from your employer. HMRC will then pay your local council. End of story, nothing complicated.

    The reason it's 3p across the whole of Scotland is because HMRC are resisting collecting different amounts for different council areas. But they can't resist collecting an extra 3p across the whole of Scotland, because they already signed up to do that under the Scotland Act.

    The only people who will suffer are those on above average incomes (which, because the skey of income distribution, is less than one third of the working population), and those who were previously paid to collect the council tax and will now be looking for other employment.

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  • 17. At 1:35pm on 03 Sep 2008, rabbiehippo wrote:

    #15 #16 should we get independance .... will HMRC be collecting our taxes?

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  • 18. At 1:46pm on 03 Sep 2008, Teledahn wrote:

    So I should work hard for what? to pay for those that can't be bothered?

    Besides it cant go through as its stands becuase centrally collected and distributed tax is against the law.

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  • 19. At 1:53pm on 03 Sep 2008, U11769947 wrote:

    I dont agree with the current council tax,there is a large degree of unfairness about the current system.

    The problems you encounter when you try to introduce a new system are complex with a number of hidden traps.

    If you reduce the burden of tax on lower income,then in all probability there will be an off set in the tax credit system,in short where you save in one area, someone will take(tax credit) reduction in another.

    Given there is no real consensus on this issue,it could well and truely already be a dead duck.

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  • 20. At 1:58pm on 03 Sep 2008, brigadierjohn wrote:

    I'm clearly not as smart as others here. I understand very little of this; for example if 80 per cent of people will be better off under LIT, how do the unlucky 20 per cent make up the shortfall?
    Everyone seems certain that his own, totally different, opinion is correct. What's new here?
    The only certainty is uncertainty. Every dot and comma is contested. Anyone who can sign up to a version of the truth, be it from Salmond, Annabelle Goldie, wee Jamieson or whoever, needs help - in my non-medical opinion.
    Why don't they all go away, have a wee think - for a change - and come back with, say, three alternatives which they all agree are at least workable, and let the people decide?
    I'm told I will benefit from LIT, living on an occupational pension that equates to the minimum wage. But would the benefit be eaten up, or indeed overwhelmed, by rising costs in other areas?
    I need to see this, laid out definitively, before I can consider anything.
    I'm sure someone will ridicule my lack of competency in fiscal matters. Why pick on me? I suspect I speak for 90 per cent of Scots who really don't understand the intricacies.
    We are being asked to sanction a leap of faith, floating on a cloud of political hot air, wafted by power-hungry opportunists.

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  • 21. At 2:02pm on 03 Sep 2008, rabbiehippo wrote:

    #18 I agree with your first statement although I also recognize that there are places in Scotland where there are little or no jobs unless you want to work for Tescos or Mcdonalds or where you might have to commute so i can understand a percentage of the population not working. At the end of the day that is another issue that im sure will be dealt with in time.

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  • 22. At 2:04pm on 03 Sep 2008, rabbiehippo wrote:

    #20 Brigadierjohn .... spot on . Now im away as the keyboard is getting worn out !

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  • 23. At 2:14pm on 03 Sep 2008, regmitchell wrote:

    #103. Simon Brooke

    So if I wish to evade this tax, I simply tell my London-based employers that I stay with a pal in Carlisle? And then just keep my flat in Glasgow, free of any council tax? And no-one will ever check? Sounds nice and unbureaucratic to me. Hmm...

    So "ONLY one third of the working population will suffer"?! What proportion suffer now?

    Anyway I don't think I'll ever see the day that ANY council makes the lay-offs you say they will. And did anybody tell those council workers their SNP vote was akin to turkeys voting for Christmas? But being a realist I know that won't happen.

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  • 24. At 2:15pm on 03 Sep 2008, Tom wrote:

    LIT will not get through Parliament, as far as I am aware. Afterall, the Green Party will surely wait to see the Labour alternative which they apprently prefer.

    However Labour have shot themselves in the foot. By offering an alternative to the council tax they have demonstrated that the council tax must be flawed a great deal.

    It will be interesting. Will for some reason Labour get to keep the current 400 million council tax benefit? By changing the system it will effectivly no longer be the same council tax that gave Scotland 400 million in the first place.

    This will be an interesting term to.

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  • 25. At 2:17pm on 03 Sep 2008, HumptyDummy wrote:

    #20 Brigadierjohn. Unless you are an MSP, you aren't being asked to sanction anything. It will be MSPs in the Scottish Parliament who vote on this, unless it becomes an election issue next time around (and, given that this LIT is a lame duck, it might well be). Such is the problem with "representative democracy" - we vote them in, they then do all the voting thereafter.

    A plea to the Scottish Government - please have the guts to call this a Scottish Income Tax rather than a Local Income Tax. If your intention, whether it gets off the ground or not, is to levy a flat 3p rate on everyone in Scotland, and you intend to collect it centrally, it is a Scottish Income Tax. Please don't try to mis-sell this, be honest, go one, you know it's buried deep in your soul...somewhere. I know why you don't want to though, you're afraid of the "Tartan Tax" jibes that will follow, so smoke and mirrors it is then.

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  • 26. At 2:24pm on 03 Sep 2008, Richard_the_Rogue wrote:

    You can get an idea of how much LIT you would pay here.

    https://www.glasgow.gov.uk/en/Residents/YourHome/LocalTaxCalc/

    It's based on Glasgow's council tax rates but you can put in your own amounts.

    I was pleasantly surprised to find that I would be paying substantially less under LIT compared to the present system.

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  • 27. At 2:34pm on 03 Sep 2008, Lankyscot wrote:

    Hmmm. How can a tax system that doesn't take account of huge swathes of wealth, i.e. property and savings, be "fair"

    Council tax is the only property-based tax and abolishing it will make our overall tax system less progressive, because it will then be more income, and less wealth-based. Reform council tax by all means, but let's pause before we ditch it for a system which isn't local, worsens work incentives, and could end up being just as difficult to collect.

    Aside from this, tax systems are more efficient if a lot of things are being taxed a small amount rather than a few things (income in this case) a lot, because people are less likely to try and avoid it.

    Alec Salmond needs to think a bit more deeply about this if he truly claims to be a "progressive", otherwise the message is "Earn less, and if you do have money put it in a house or savings, just not anything that can be taxed by HMRC".

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  • 28. At 2:39pm on 03 Sep 2008, Bangingonabout wrote:

    People are trumpeting the "fairness" of LIT. I don't think it's actually as fair as people think and while many may end up paying less for council tax I think they will end up losing out elsewhere (either by paying more or losing services).

    My reasons are below (which is an edited version of a previous post).

    Working on the basis that the council tax budgets will remain the same in order to provide the same services, I tried to work out the effect on me and project from that.

    I live in a reasonably large house and together with my wife earn a reasonably large salary. I calculate that, even if the 3% is set on our GROSS earnings, I will be better off under the new system. People round here that I know who earn more than me tend to live in larger houses, so I can't see them being worse off either.

    People who earn much more than me, probably already have an accountant to minimise their exposure to income tax, and people who earn much, much more than me will have organised their finances so that they pay as little income tax as possible.

    So as I see it, the large majority of rich people will (or soon would) have organsised their tax affairs to minimise their exposure by getting income from shares, etc. Or, if they live in the South, by the simple expedient of moving to England (wealth generally means mobility).

    So who would probably be hit with a larger bill?

    Well one would be working couples who have deliberately (and prudently) bought a small house to minimise their mortgage and their debt.

    Then there's the council tax benefit that is costed into running the system (and that's assuming that Holyrood will still get it). This benefit is effectively subsidising the council tax system across the board. In other words, a benefit that is meant for the poorest people is now going to help reduce MY council tax bills.

    According to some accounts I've read, even with the benefit added in, the tax raised will still not cover the existing council tax budget so it will have to be subsidised even further from general taxation.

    Now the only way to stop a lot of the above happening would be to reduce council budgets, which will mean cuts to services (because the chances of them reducing the work force is probably nil), which will hit the poorest and most needy again.



    So it seems to me, that the new system would be unfair and is actually likely to make poorer people even worse off than now (they may pay less council tax but it will generally be taken back again in "stealth" measures) - while wealthy people will see little or no effect.

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  • 29. At 2:39pm on 03 Sep 2008, regmitchell wrote:

    Simon Brooke.

    My #23, meant to say your #16 - sorry, I don't know where the #103 came from!

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  • 30. At 2:46pm on 03 Sep 2008, OhNoJoko wrote:

    Here we go again. Let's increase tax on those people in society who are prepared to graft. LIT will ensure the unemployed will have even more reason not to find a job, and those on benefit and tax credit will work even less hours to ensure their benefit payments are not reduced.

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  • 31. At 2:47pm on 03 Sep 2008, Older than the Pyramids wrote:

    #26, Richard_the_Rogue

    I tried various figures (by progressively increasing my income from its current level), and I was hard-pressed to be worse off.

    If put to the people, it would surely be a case of asking turkeys to vote for the abolition of Christmas!

    And unlike England, there are those among the better-off in Scotland who ARE prepared to pay higher taxes in order to create a more-inclusive and 'better' Scotland for all; and, for the first time, this SNP government is self-evidently putting Scotland FIRST!

    --

    If Labour MSPs insist on voting against, they may as well put the 'For Sale' signs up at party HQ.

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  • 32. At 2:56pm on 03 Sep 2008, U11769947 wrote:

    #28

    Right on!

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  • 33. At 2:59pm on 03 Sep 2008, Dave McEwan Hill wrote:

    Good to see the SNP not deviating from their plan to bring in LIT to to replace the unfair, illogical and increasingly complicated Council Tax.
    The furious attacks on this by Labour and Tory merely confirm how popular and how right this move is.
    Some really strange comments already on this post.
    Why shouldn't two (or three or more) wage earners in one house all pay their share? Of course they should!
    I look forward to labour telling all the poor, the pensioners, the single parents and the unemployed why they think they should still pay a much higher proportion of their income than the well off. Or why those on good incomes who have been happily dodging the tax by living in multiple occupancies should continue to get off with it.

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  • 34. At 2:59pm on 03 Sep 2008, regmitchell wrote:

    Thomas Porter #24.

    It's a little simplistic to suggest that offering an alternative or an improvement means the original concept was necessarily seriously flawed. One does not automatically follow the other, even for cheap political points.

    Kellogs produce cornflakes. They also make Frosties. Does that mean cornflakes are flawed? Enviroments, expectations and circumstances change. That's what happens. It's called evolution and applies to all organisms, otherwise they die.

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  • 35. At 3:01pm on 03 Sep 2008, aflockhart wrote:

    #20

    The main reason Salmond and co are able to claim "80% will be better off" is because the level of tax they propose (3p in the £) is too low to raise the same amount as the current Council Tax.

    The most optimistic independent sources have calculated that 3p LIT will raise at most about 2/3 of the money raised by Council Tax. So councils will lose a third of their council tax revenue.

    This would need to be made up in one of three ways (or a mixture of all three):

    a) by increasing other charges for Council services - pay more for your parking tickets and permits, sports centre entrance fees, rubbish collections, home help charges, library charges, music lessons, etc - so they still get the money out of you, they just call it by another name.

    b) By cutting local services to save money.

    c) By taking money away from other services such as hospitals, police and prisons so that Alex can give it to Councils.

    Or alternatively, the LIT could be set at a more realistic 4.5p or 5p figure - but then they could not claim "80% better off".

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  • 36. At 3:03pm on 03 Sep 2008, Bangingonabout wrote:

    The_Forfarian.

    Re your #31 and my #28.

    If we're ALL finding ourselves hard-pressed to be worse off under LIT then where exactly is the money going to come from?

    Not from the wealthy I'll bet.

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  • 37. At 3:08pm on 03 Sep 2008, brigadierjohn wrote:

    #26 Richard: Thanks for the link. Tried it. Looks like I'll pay nothing! Brings me back to my #20 - how does the council get the money to run things?
    Some other "stealth" charge seems inevitable. Will it be on water and sewerage (excluded from the calculation) or crossing the road?
    If something looks too good to be true, it usually is!

    #31: Turkeys make a good analogy. We're lured into the big shed with a few handfuls of feed. Then they put us on a hook and rip out our entrails.
    All nicely trussed up and frozen until they choose to roast us after Independence Day.

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  • 38. At 3:13pm on 03 Sep 2008, aflockhart wrote:

    #26 and #31

    The calculations on that website are based on the assumption that the LIT will be set at 3p, which is not enough to replace the revenue lost by abolishing council tax.

    And it does not take account of how the missing funds will be made up.

    If the SNP really think councils can get by without a third of their council tax income - and I suppose it would be a suitably Thatcherite economic policy for Alex Salmond to follow - then I have a suggestion that would make *everyone* "better off" - just cut the Council Tax by a third.

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  • 39. At 3:14pm on 03 Sep 2008, brigadierjohn wrote:

    #35: Thanks for the reply. This is what I suspect will happen. Surely Salmond has a more plausible explanation, but I haven't seen it. Like so many of his policies there is a Black Hole in the middle.

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  • 40. At 3:17pm on 03 Sep 2008, U11769947 wrote:

    #33 sneckedagain

    We are in agreement on the concept of taxation but this proposed bill will do nothing to help those who are on lower incomes.

    The 2% efficiency programme, combined with LIT have all the hall marks of the 1980's economics disaster.

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  • 41. At 3:29pm on 03 Sep 2008, aflockhart wrote:

    #16

    It's far from "obvious" that local income tax is fairest.

    Especially one like the SNP's proposal that does not tax unearned income and dividends.

    There are a fair number of people who are wealthy and have expensive houses, but who can arrange to live off their dividend income or their savings. Why should these people not pay a share ?

    Why are you so opposed to a property tax making up a relatively small part of overall taxation ?


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  • 42. At 3:31pm on 03 Sep 2008, brigadierjohn wrote:

    If we get Local Income Tax, how long before we have local purchase tax (as in the US) local road tax, local fuel supplement and "local anything else" Alex dreams up? Let's say Scotland has to pay an admin charge to the DVLA for any necessary system changes. Could it be £1 per renewal or £10? Better not give them any more ideas.

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  • 43. At 3:31pm on 03 Sep 2008, hadrianswall wrote:

    It makes me laugh that the Unionists on here have done the calculations and realise they will be better off under the LIT. Reluctantly, they look for arguments against LIT but deep down they know this policy is right and that people will support it. See the light

    Freedom

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  • 44. At 3:32pm on 03 Sep 2008, MaliceTown wrote:

    A local income tax will see me paying more and the neighbour who does'nt work paying nothing for exactly the same services. I cannot find one good thing about this tax...

    Making a difference is not the same as making things free, we will have mediocre education system, mediocre health care to go with a mediocre economy oh and mediocre athletes as there is no money. A referendum NOW!!! This is the only pledge they will keep, they will have it when they think they will win, who has a referendum when they know they will lose?

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  • 45. At 3:36pm on 03 Sep 2008, Bangingonabout wrote:

    #39

    Salmond doesn't need a plausible explanation.

    People will be fooled by the "fairer" arguement without looking at the detail. So when it gets voted down for being unworkable and unfair he'll just pull out his "we're a minority government and they stopped it" get-out-of-jail-free card.

    Failing that, there's always the "worst settlement since devolution" joker in the pack.

    Real card sharp is Mr Salmond !!

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  • 46. At 3:40pm on 03 Sep 2008, Bangingonabout wrote:

    #43 Hadrians Wall

    Yes, we've done our calculations. Yes, a lot of us (who could afford to pay more) will be better off.

    But the calculations don't end there.

    You tell us. Where's the shortfall going to come from?

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  • 47. At 3:49pm on 03 Sep 2008, U11769947 wrote:

    #45 46


    I couldn't agree with you more.

    Keep up the good work,it's refreshing!

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  • 48. At 3:49pm on 03 Sep 2008, brigadierjohn wrote:

    #43: Alex Salmond is relying on people who see things in such simplistic terms. Populism is his middle name. I very much fear it might work in our dumbed down nation.
    It's like daft folk who grab phoney two-for-the-price-of-one offers in supermarkets, only to find they throw one in the bin because they didn't need it.
    Yes, I will benefit from LIT. But where will it's results cost me dearly?
    Freedom -- from gullibility.

    You know, the word "gullible" doesn't appear in the dictionary.

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  • 49. At 3:52pm on 03 Sep 2008, Dunroamin wrote:

    43. Have you been reading the posts on this board?

    The LIT may be less than the CT but the money LIT raises is less than that raised by CT therefore the blackhole has to be filled by funding for other schemes.

    Has Salmond said which services will be cut to cover this deficit?

    Will there be tax rises elsewhere to preserve the funding instead?

    Why should the unemployed, sick benefit and the wealthy not have to pay for local services?

    Why don't the councils deserve fiscal autonomy yet the SNP believe they do?

    How are the SNP going to prevent people evading this tax by putting money into tax-free property?

    Only the nationalists preach everyone will be "better off" and that this system is "fairer".

    Maybe they should investigate it themselves instead of just taking the SNP's word for it, as they always seem to do.

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  • 50. At 3:52pm on 03 Sep 2008, Bangingonabout wrote:

    #48

    Yes, it does. I just looked..... Oh!! :-D

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  • 51. At 3:56pm on 03 Sep 2008, forfar-loon wrote:

    #26 Richard_the_Rogue:

    Thanks for the link. I think I can safely tell you all not to worry about LIT - looks like me and her ladyship would make up any shortfall as our council tax would skyrocket by almost 50%! You're all welcome!

    How do we manage that? We're both working full time - well, when I'm not blogging ;o) - earning good money, have a 2 bed house and no weans or wrinklies cluttering the place up.

    So I presume it's largely the likes of us that will be making up any shortfall. Would I call in an accountant to stash away the loot? Not for the sake of a few hundred quid a year. Would we emigrate because of it? Again, not for a few hundred quid a year. I would take any dire warnings of a brain drain/mass exodus with a pinch of salt!

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  • 52. At 4:03pm on 03 Sep 2008, U9461192 wrote:

    It makes me laugh that the Unionists on here have done the calculations and realise they will be better off under the LIT. Reluctantly, they look for arguments against LIT but deep down they know this policy is right and that people will support it. See the light

    We wouldn't have been better off. We'd have been several thousand pound a year poorer. Another reason we abandoned ship.

    Now the rich will be paying substantially more to live in the rain. That extra 5000 quid a year in Scot Tax would buy them 100,000 quids extra worth of house somewhere warmer. They'll have to offset that against the scale of accomodation they can afford by virtue of living in Scotland. Watch for the well-paid bankers and insurance types of Edinburgh to reassess which one of London/Leeds or Edinburgh they'd like to be considered resident for Scot Tax purposes.

    Good riddance you might say. Hmmmm. Be careful what you wish for.

    We certainly got out ahead of the rush. But folk can't say they weren't warned.

    On the up-side there has to be some savings as the SNP present entire council departments with their P45s. It's an ill wind and all that.

    Freedom

    Can I have that Mel Gibson video back when you're finished with it?

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  • 53. At 4:04pm on 03 Sep 2008, Bangingonabout wrote:

    #51 Forfar_loon

    My commiserations. I'll buy you a beer next time we're down the pub.

    Looks like you've just proved my assertion in #28.

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  • 54. At 4:11pm on 03 Sep 2008, U9461192 wrote:

    Would we emigrate because of it? Again, not for a few hundred quid a year. I would take any dire warnings of a brain drain/mass exodus with a pinch of salt!

    Mass exodus? No, of course not. Mass exodus of folk earning in excess of 200,000 a year. Their council tax now going from 2000 to 6000 a year. Could happen.

    What you'll definitely get is a mass 'never came in the first place' from those high earners. You might think they're unnecessary parasites but a lot of lower earners rely on the jobs they bring too. You've gotta treat your rich right or they just leave and you'll miss them more than you realise.

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  • 55. At 4:19pm on 03 Sep 2008, A_Scottish_Voice wrote:

    I'm half expecting the next whinge to be - yeah but, no but, what if a big meteorite hits me on the head, what will Alex do then.

    Get a life people.

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  • 56. At 4:19pm on 03 Sep 2008, timepassescarmichael wrote:

    One of the trickiest things for Labour in this term will be to convince people of their arguments against LIT because they have ringed a little hollow up 'til now. I find it hard to believe that a party that still claims to represent you and I, the ordinary Joe struggling along as poor wee Scots, can credibly argue against a form of taxation that takes a person's ability to pay into account. If I've followed the whole thing right their argument is that such taxation will lead to a loss of tax revenue and therefore a diminution in the quality and amount of public services. All very well and it's a position that would find some sympathy. Yet, to contest that there will be a loss of tax-revenue is to explicitly support the Westminster position that Scotland should be denied £millions because of the little thing called Scottish democracy and policy-making. That is where Labour will fall down over LIT.

    Labour's position amounts to supporting the Council Tax, raging against a progressive form of taxation, and being content that Westminster should withhold a portion of the tax revenue that came from Scotland and was due to be redistributed had not, once again, Scottish democracy got in the darned way. I think, though, Labour aren't all that upset about LIT itself but what it would do to their ideas of a centralised UK. Once again the problems of Westminster withholding Scotland's money becomes part of the dangers of Labour's oppositon to LIT since their ideas, that a centralised state is of the utmost importance to everyone involved, comes to look a little less like benign paternalism and a little more like paternalism of the order a little less than benign.

    The whole arguments that are about to get played out over LIT also will come to reflect very badly on Labour's notion that the UK is stronger together (in reality, centralised) than apart (in reality, interdependent). Quite why Scotland should be hamstrung in making decisions over its form of local taxation because of Westminster begins to seem a wee bit silly if one considers Scotland to be a democracy and coupled with that democracy a proper level of accountability and legitimacy rather than a backwood, backwater provincial hand-wringing contest (was that really the great vision of devolution?). Quite why Labour should want to argue against the countries of Great Britain and the British Isles holding the proper apparatus to interact maturely, recognise the interdependence of these Isles, and ensure the political structures to make different decisions, while aiming for mutual benefit is beyond me, but such a wont seems to underpin their opposition to LIT.

    The answer for Labour would simply to support LIT, praise it as a progressive tax, and move on, well, that's the solution for Labour in Holyrood. Things get a little bit more complicated for those Labour MPs we used to hear so much about; things could get a little more complicated for them if such opposition merely demonstrates the failures of this union, and their place within this union.

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  • 57. At 4:20pm on 03 Sep 2008, Dunroamin wrote:

    I wonder if Salmond would be happy to give local councils full autonomy when it comes to LIT?

    12-15% income tax and councils keep all the money. This being offset by an equivalent drop in income tax at Holyrood/Westminster level.

    (This reference to the UK govt as 'Westminster' has always puzzled me. The Parliament is in Westminster but the Government is in Whitehall.)

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  • 58. At 4:30pm on 03 Sep 2008, Older than the Pyramids wrote:

    #57, Reluctant-Expat

    "The Parliament is in Westminster but the Government is in Whitehall."

    Not sure what your point is: Whitehall (a road) is in Westminster (a London borough).

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  • 59. At 4:33pm on 03 Sep 2008, Dunroamin wrote:

    56. To suggest Labour are against devolution is a little ridiculous when you remember that Labour introduced devolution and the +/-3% income tax (that Salmond bizarrely refuses to use in favour of his own 3%).

    Also Labour are not witholding the CTB because of "Scottish democracy and policy-making" (whatever that means). They are witholding it because it is a benefit for low-earning Council Tax payers (hence the name). If there is no Council Tax, that benefit ceases to exist - and will possibly have to go on Income Support instead.

    Finally, (once again a reminder is needed) the CTB is not "Scotland's money". A claim that doesn't make any sense whatsoever.

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  • 60. At 4:35pm on 03 Sep 2008, Bangingonabout wrote:

    #55

    Sorry, but I completely missed the point you were making.

    Do you think LIT is good, bad or what? How about under 21s in off licences?


    #56

    Disagree with you in para 1. Saying there will a loss of tax revenue is simple maths. It doesn't imply you want to deny Scotland anything. If anything it implies that you want to ensure that services are maintained.

    The answer for Labour would be to support a reform of the CT thus ensuring that CT benefit will keep coming to Scotland without any argument at all.

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  • 61. At 4:35pm on 03 Sep 2008, jam804 wrote:

    I agree with the comment made at #14:

    "This isn't a 'local' income tax; it's the same rate in Lerwick as it is in Stranraer, and those two places are not local to each other."

    Such a system negates local initiative and accountability ie democracy. In fact it tends towards making local councils irrelevant.

    Also, are allocations to councils to be simply per capita or even worse pro rata to what is taken in tax "locally"? Meaning that the more wealthy an area the more it receives? Or alternatively will LA's have to "bid" for extra funds or will there be a formula "factored in" to take into account areas with higher needs? Will this be called the McBarnett formula if it is deemed necessary?

    The current property based tax is flawed but at least it takes into account an aspect of wealth. Property can't be hidden as easily as "income".

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  • 62. At 4:36pm on 03 Sep 2008, forfar-loon wrote:

    #44 MaliceTown:

    Oddly similar to this offering from the Have Your Say "discussion" (BTW it's scary in there!)...

    "Making a difference is not the same as making things free, we will have mediocre education system, mediocre health care to go with a mediocre economy oh and mediocre athletes as there is no money. A referendum NOW!!!"

    MandyMac


    Did you really think this was worth spouting twice?

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  • 63. At 4:37pm on 03 Sep 2008, forfar-loon wrote:

    #53 BOA: That's the best suggestion I've ever seen on Brian's blog :o)

    #54 UB40:

    I suspect someone earning 200,000 a year wouldn't be that bothered about paying an extra 4,000 in tax. Just as a few hundred quid for me on my more modest earnings is not going to dictate where I live/move to. Besides, if high earners (or their accountants) have any nous they'll get around whatever system we have in place.

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  • 64. At 4:40pm on 03 Sep 2008, U11769947 wrote:

    #56

    I've no doubt you mean well but the LIT system as it stands does nothing in terms of lifting those on lower incomes out of an unfair taxation burden.

    If you are indeed in favour of a more effective distribution of wealth,could I suggest that your answers dont "lie" with the snp.

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  • 65. At 4:44pm on 03 Sep 2008, forfar-loon wrote:

    Interesting...in my #63 I attempted to abbreviate 200,000 by using 200 followed by a single letter that falls between J and L. Such a large salary kept getting blocked as a profanity!

    Bighullabaloo: I take it all back, clearly the Beeb is now automating left-wing bias ;o)

    In an attempt to restore balance I would add to #34 (regmitchell) that other cornflake brands are available.

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  • 66. At 4:45pm on 03 Sep 2008, minceandmealie wrote:

    Most posters above who say they are opposed to local income tax are deploying arguments against income tax in general.

    For example, those who point out that a household with several people working will pay more than one with one person working, that is how income tax works already. I don't suppose you would replace income tax with a flat tax per household? That would be unfair, wouldn't it....

    It is also argued above that wealthy high earners may structure their affairs to avoid paying any local income tax, so paying nothing, and also that wealthy will pay an unfair and excessive burden and so flee the country, cease to work hard any more, turn purple or whatever. I don't suppose it can be both of these....

    Actually, it is probably neither. Most high earners pay a fair whack in income tax on salary, and may also have income from shares or other investments outwith the scope of what the Scottish government can tax. So the average high earner is going to be hit for a fair amount of LIT, quite likely to be more than they are paying just now under the council tax top band, but working out to be less than 3% of all their earnings. If you have any figures that disprove this hypothesis I would be interested to see them.

    Anyway, this is all just chat. As far as the politics go, can you see people out on the street demanding to save the council tax? "We love the Council Tax!" Even the Labour leadership hopefuls have all been forced to admit it needs to be changed. The Tories used to hate the rates, as I recall, and now they are the only party rock hard behind the council tax, which is more or less the same as the rates. Funny old world.

    A far more entertaining one politically is the proposed twenty-one rule for buying a carry out. I can just about see students staging a "right to drink" march...and I can see people shouting things at them....

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  • 67. At 4:47pm on 03 Sep 2008, corporationtax wrote:

    Wouldn't get too excited about LIT being some sort of panacea for wealth redistribution. Nor will top earners need the to look for creative accountants to shelter income. Instead, soothing noises have been made to the business community that there will be a cap placed on the maximum levels of contributions an individual will be levied for in terms of LIT. Surprised the opposition parties haven't ruffled some feathers on this one.

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  • 68. At 4:52pm on 03 Sep 2008, U9461192 wrote:

    Also, are allocations to councils to be simply per capita or even worse pro rata to what is taken in tax "locally"?

    That was something that worried me. Before we left. Tax, even small amounts on the very poor, serves one useful purpose. It connects them to the cause and effect of their decisions. At the extreme - if you suddenly take half the population entirely out of tax then they have absolutely no reason to consider the consequences of their votes. Yeah, let's vote ourselves jacuzzis and Lear-jets!!! And some other numpty has to pay.

    And that, gentle readers, is why the single persons allowance is 6,000 quid a year. Sure we could raise just as much money setting a flat tax of 20% and a tax free allowance at 15,000 quid. Plus we could fire about 80% of the revenue people. But then all those on 14,000 quid would be looking for you on 16,000 quid to fund a swimming pool for their street. Quick show of hands and viola new pool. Before you knew it your flat tax would be 100%.

    Another point - this is just centralisation of power. In a small constituency (numerically) like Scotland that may make sense to a certain extent but long-term it may/will be used to 'punish' councils (or rather local voters) who vote the 'wrong' way.

    There are however massive savings in terms of unnecessary duplication/multiplication of council functionnaires across all the counties so the shortfall from the 3% could easily be made up by firing a whole bundle of council staff. Or at least initiate a ten year hiring freeze.

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  • 69. At 4:54pm on 03 Sep 2008, U9461192 wrote:

    Interesting...in my #63 I attempted to abbreviate 200,000 by using 200 followed by a single letter that falls between J and L. Such a large salary kept getting blocked as a profanity!

    Nope. I wanted to use a 2 followed by the letter that dare not speak its name yesterday. Same problem. Took me till this AM to figure it out. Hence the long-hand.

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  • 70. At 4:55pm on 03 Sep 2008, handclapping wrote:

    #16 Simon_Brooke

    So Local Income Tax is "obviously" fairer.

    My income is more than twice the UK median but Mr Darling doesn't get a penny piece out of me so even if the SNP got their 3p in the £ it would be 3% of £0 which is a big fat £0. What is fair about that.?

    I pay £ thousands for my council tax and I use a lot of the council services now, planning, libraries, bins and probably even more so in the future if I'm unlucky enough to grow frail and need the social services as well. What is not fair about that?

    Most of the top earners can avoid paying anymore income tax than they have to, some even by emigrating if they want to. Can we really afford to loose big wealth creators? Ordinary people mostly can't avoid paying their taxes, their only hope is to find a job elsewhere and emigrate. Can we really afford to loose any wealth creators? What is fair about that?

    My home could easily house a family of four but I'm selfish enough to want it for myself. There are folk out there desperate to get housed but I get a 25% discount on the council tax to live on my own. What's fair about that? I had another house in the centre of town that I kept empty for 3 years and paid no council tax. What's fair about that? Not much in either case but they don't need a LIT to put right, just a reform of the council tax.

    How will HMRC distribute all the 3ps? By where you earn or where you live? What if you move a) house or b) job? Or will our Scottish Government swipe the lot and say leave it to us to hand out? In which case haven't they just created quangos out of every local authority? I thought quangos were against SNP policy.

    When politicians start talking "fairer", "justice", "national", we need to turn that stone over and examine what's underneath very carefully. This proposal is to replace one "unfair" tax with another "unfair" tax. To paraphrase a wise Irishman, also speaking of local government, "the price of liberty is eternal vigilance".

    PS #48 The traditional answer is - only because you mis-spelled gullable.

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  • 71. At 5:00pm on 03 Sep 2008, brynt41 wrote:

    LIT sounds fantastic to me. I wish the Welsh Assembly could bring it in.

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  • 72. At 5:04pm on 03 Sep 2008, Older than the Pyramids wrote:

    What about water and sewerage charges?

    Are they supposed to be met by LIT?

    If not, the current collection arrangements will have to be maintained (or something at least as cumbersome put in their place).

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  • 73. At 5:14pm on 03 Sep 2008, one step beyond wrote:

    I agree with some of the above posts. You will have a situation of a large family of fairly low paid workers paying collectively a very large bill. Meanwhile the off shore millionaire living in his mansion will pay nothing.

    Example family of 4 living in 3 bedroomed house, all working and earning on average 12,000 per year each. Currently, depending on where they live, they may pay £1000 per year for their current council tax. I may be wrong but I think it unlikely that the LIT they each pay will be £250 each or less, it is likely to be substantially more and they wil be worse off. Wonder if they will get 4 times the amount of rubbish collections. Reminds me of something, oh yes I remember, used to be called the poll tax.

    While the likes of Mr Ambromovich pays nothing in his mansion. On that score it is also good for those with second homes, may get more English buying holiday homes, no tax to pay!

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  • 74. At 5:20pm on 03 Sep 2008, bighullabaloo wrote:

    "It is often difficult, in truth, to discern a theme from such legislative packages."

    Allow me, Brian.

    Salmond belts another scorcher into the net as the "opposition" do their version of the Keystone Kops.

    Not so difficult after all, eh?!

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  • 75. At 5:21pm on 03 Sep 2008, Amusedyank wrote:

    Just happen across this article on Google's news page, and being someone on the outside looking in, I wished we here in the USA were having this debate.

    Right now (I live in Arizona), I pay 1000 pounds (forgive my lack of knowing how to get the right currency symbol to display) to what you would call "Council Tax", here it is known as Property Tax (it has other things tacked on like Library funding, bond funding, and local school funding). My home is valued at about 80,000 pounds.

    Then I pay a state and federal income tax, the rate is about 18% total between the two. So in pounds I pay about 2000 in income taxes. My wife and I earn about 45,000 pounds a year.

    We have the same problem here in the US as you do now, property taxes have greater impact on lower and middle income people, as the wealthier seem to find ways out of paying. Those that work for employers who pay them with cash, and thus not report the income to authorities, pay nothing; as do those that make a living in other nefarious ways (dealing drugs, stealing, and what not). There is a growing movement in the USA to totally scrap the property tax and the income tax and move to a sales tax.

    Sales tax here does not get applied to food you by from a Grocery store, convenience stores, butcher shops, or bakeries. It only gets applied if you goto a place that prepares your food for you (McDonalds for example).

    We in Arizona pay about 8.1% on every dollar spent for sales tax. Rural areas pay less as they have fewer government services to pay for. The state levies about 5.5% and the county / city levy an additional 2-3.6% (depending on where you live).

    So by going to a tax system based entirely on sales of non-food items, everyone will pay regardless of their wealth or job. Each family can control their tax burden, and those that choose to earn a living outside of government observation will still pay their share.

    Those that are on pensions or still below a certain level of poverty, can apply to the government for a rebate.

    Just a though from someone who has lived with a "Council Tax" for all his life, and has known people who manage to live without paying a penny of tax outside that of Sales Tax.

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  • 76. At 5:24pm on 03 Sep 2008, quietscotsmac wrote:

    #7
    'Why not amend the existing Council Tax? Add in more bands perhaps?'

    What good would that do? Some pensioners live in houses they've lived in for many years and worked many years to maintain it.

    For example, my house is band F and I pay accordingly. That was fine before I became a pensioner. I'm now asset rich etc.

    Perhaps you're one of those of the opinion that single pensioners should just sell up and go and live in a one bedroomed box.

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  • 77. At 5:35pm on 03 Sep 2008, Anaxim wrote:

    The Lib Dems are edging away from LIT, so it most likely won't happen. I would say that it's disingenuous to state that Lib Dems ought to support the SNP's blanket income tax as 'it's basically the same'. The differences, and what they'd mean for Scottish society, are enormous!

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  • 78. At 5:59pm on 03 Sep 2008, forfar-loon wrote:

    #75 Amusedyank:

    Welcome! Thanks for sharing your experiences with us. As Burns said: "O wad some Pow'r the giftie gie us, To see oursels as others see us" I hope you continue to drop in!

    Funding everything from sales tax has its appeal - it would certainly hit the big spenders hardest (if that is what we want).

    One concern I have is that it would dampen consumer spending, at least in the short term (no jokes about Scottish thriftiness please!). This was certainly the case in Germany a year or two back when VAT was raised there. But as with all things, we would adjust to higher prices and no doubt the level of spending would recover once the initial shock wore off.

    Another potential drawback would be the growth of the black market - we might well end up bartering with each other again! No bad thing some might say, although the taxman might beg to differ!

    Finally it would be very hard for the government to predict tax revenues under such a system. If food prices shoot up (as recently) then there would be less money sloshing around to be spent on goods subject to sales tax. Smoothing these peaks and troughs would be a tricky task.

    How are people in the States proposing to tackle these potential pitfalls?

    PS Don't worry, nobody here can get the pound sign to appear either! Too advanced for the BBC techies to resolve it seems ;o) I would just use GBP.

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  • 79. At 6:16pm on 03 Sep 2008, tuairimiocht wrote:

    Aberdeenbill:

    "Why are the SNP so keen on LIT and yet they were so opposed to POLL Tax."

    Because an income tax will be progressive, meaning the more income one has, the larger a proportion one pays. On the other hand, the poll tax is regressive (a flat tax), since everyone pays the same amount. Thus, low-income residents are hit disproportionately hard by a poll tax.

    For this reason, the LIT seems like a very good idea. It also takes the unemployed out of the property-tax net automatically, without their having to apply for council-tax benefit.

    You suggest that Alex Salmond get a life. His grasp of public finances are sound enough to suggest that he has spent a long time studying them - and he may therefore need your advice!

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  • 80. At 6:23pm on 03 Sep 2008, one step beyond wrote:

    Thinking about this more if the liberal democrats and or labour party were clever they would point out what they see as downsides of the proposal

    1. Black hole in the finances

    2. Unfairness on those large familes on low incomes who have to live in the same house because they cannot afford to move out.

    3. Situation of the multi millionaires who do not pay income tax but do pay council tax. Under this proposal they will pay nothing.

    4. Second ome owners, particularly from England, who do not pay income tax in Scoitland will now also pay no tax on the property.

    There are others, but that would do to start. They then get assurances from the SNP that all would be ok. In view of this they decide to abstain on the vote and it gets passed.

    Fast forward 12 months, nightly on the news there will be stories of low paid large families strugggling to pay the increased tax. Comparisions with the multi millionaires and English second homers paying nothing. Those families better off under the new system won't make the news, unfortunately a good story is no story. There were some gainers under the poll tax, how much coverage did those that benefitted get.

    More T.V. coverage about the budget defict and hospital services being cut.

    Pan to oppostion politicians firmly putting the blame on the SNP, roll on the election.

    Unfortunately this will not happen, opposition politicians will block this proposal and the SNP will make the headlines complaining about them and how Scotland needs independence to manage it's own afairs

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  • 81. At 6:24pm on 03 Sep 2008, Edi_Scott wrote:

    There is no perfect solution. However this one is insane. The only winners will be the very rich who can afford creative accontants and the low earners, but even then there is a mechanism to help the low paid.
    There is no mention of the fact that we have an ageing population and the potential double whammy that that brings with it. Higher costs to support them, and little or no income as their income is unlikely to be swept up easily via PAYE.
    The best way to spread the tax burden is to have more than one mechanism ie earnings related via PAYE and 'wealth' related via the CT. LIT only adds to the PAYE burden.
    There are similar problems in raising funds in limited membership Golf Clubs where the age mix is growing. OAPs get reduced subs and the burden is being spread over a reducing middle aged population.
    This LIT will also push people into the black economy. An alternative tax would be a sales tax. Penalising those who spend.

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  • 82. At 6:29pm on 03 Sep 2008, U11769947 wrote:

    I would like to see some reply from Oldnat and Brownedov, after all they do provide a strong argument on all their views.

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  • 83. At 6:29pm on 03 Sep 2008, Lankyscot wrote:

    Well, I'm wondering how it adds up too. The official stats say that 1.8bn GBP came to councils in CT in the 2006-07 financial year. A further 359m GBP came from CTB.

    Sure there's a Scot Govt paper outlining what it should be - but if we take 3% of the Scottish average earnings in 2007 (£22,831 according to ONS) and mutliply it by 2.4 million employees we only come out at 1.65bn GBP. Even we still get CTB in a new form then we're still £150m short.

    I'm assuming this is being made up by John Swinney from central government funds in last year's spending review, but it does represent a substantial shift from locally- based taxation to central funding (again).

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  • 84. At 6:47pm on 03 Sep 2008, xjonboy wrote:

    If this really were LIT (although it sounds more like NIT) it would be horrendously complicated and more costly to administer than council tax - raising money where you work and applying it to the council where you live.
    And what if you work in Scotland and live in England? You would end up paying twice - Scottish income tax and English council tax.

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  • 85. At 6:49pm on 03 Sep 2008, DunkyR wrote:

    Surely a flat rate of 3p across the nation isn't fair? Though if for one year then putting in the flexibility that would make it fair probably not a bad thing. Or actually giving local councils the framework to work out the best flexible rates for their adminstrative areas would be possibly offer greater equality?
    The drinking plan, well I'm not sure targetting under 21s will really help. My main experience in Scotland isn't with drunk youths (being reliant on public transport, a bicycle and my feet) but mainly with drunks during the day. Mainly male and definitely not under 21. On the trains many seem to be oil workers. The problem isn't just the 18-21 year olds but across many ages and possibly in the rougher bits of town. What about seriously looking at where our drinking culture stems from and try properly working from there. When I go out it's not just the under 21's I see falling over causing trouble.

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  • 86. At 7:06pm on 03 Sep 2008, one step beyond wrote:

    Currently, according to the Scottish Government web site, there are 100,000 second homes or vacant properties in Scotland. Council tax is still payable on these houses, indeed recently there has been a move to ensure they pay 100% council tax (quite right). If you take an average council tax bill of 1,000 GBP, that works out as 100 million GBP.

    Under a local income tax this will not be paid and will leave a further deficit in the budget. Unless of course they maintain the current system to collect council tax from second homes, in addition to the bureacracy needed to collect income tax.

    You would also need another bureacracy to establish which were second homes and maybe enquiry agents to run checks. Either way it would become an unworkable mess

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  • 87. At 7:12pm on 03 Sep 2008, goodingm wrote:

    #49 Cowpat, you are a real dumpling. Alex Salmond has already stated that the shortfall will be made up with the current £400M CTB and an extra £280M from Government funds.
    There is no black hole.

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  • 88. At 7:23pm on 03 Sep 2008, oldnat wrote:

    I'm only going to comment on one item, before I actually read the Scottish Government's programme for 2008-09.

    I totally support the plan to ban all displays of cigarettes in shops. I've tried to give up the foul weed on a number of occasions, and each time I've succumbed to the addiction, it's been those damned displays behind the counter. We don't allow less dangerous drugs to be openly displayed for sale, and I see no reason to allow it for tobacco. I urged my previous Labour MSP (and Executive Minister) to do this, but no joy.

    I may disagree with other parts of the SNP programme - but not this one. Well done the Scottish Government!

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  • 89. At 7:28pm on 03 Sep 2008, Amusedyank wrote:

    #78 forfar-loon:
    “Funding everything from sales tax has its appeal - it would certainly hit the big spenders hardest (if that is what we want).”

    It would not necessarily hit them harder, as sales tax is a percentage of the purchase price. It would however be up to the person who is making the purchase to evaluate the costs (and associated tax); maybe they don’t buy the 1,500GBP flatscreen television (300GBP sales tax @ 20%), and instead go with the more economical 1,000GBP (200GBP tax @20%) television. This is totally the purchaser’s choice, and ultimately they get to choose how much tax they want to pay to the government.

    “One concern I have is that it would dampen consumer spending, at least in the short term (no jokes about Scottish thriftiness please!). This was certainly the case in Germany a year or two back when VAT was raised there. But as with all things, we would adjust to higher prices and no doubt the level of spending would recover once the initial shock wore off.”

    That certainly could happen, and it will take some getting used to, as you said levels will return once people get used to the costs. Other thoughts on this, are exactly the opposite. One line of thinking is spending will actually increase as there will no longer be withholdings to pay income taxes, your entire paycheck will be yours to do with as you please.

    I know with my paycheck, my employer withholds about 30% for income tax (state, federal, and other federal taxes like social security and medicare) payment alone. This does not include health insurance or pension fund payments (these payments are usually taken out before your tax withholding is figured and thus are not taxed). So automatically, I would see my take home pay increase over 20%.

    “Another potential drawback would be the growth of the black market - we might well end up bartering with each other again! No bad thing some might say, although the taxman might beg to differ!”

    The tax man can go to, well this is a civilized discussion :). Ultimately, someone bought the item from some place at some time, and thus paid sales tax. In the USA, sales without tax are strictly monitored (distributor to retailer or wholesaler to retailer); ultimately the retailer is the entity that collects the sales tax.

    In order for sales to be made without a sales tax being levied, the purchaser must produce a sales tax license, this license is in essense a contract to collect appropriate taxes when the items are sold to the ultimate consumer. This license is necessary to conduct business, and thus failure to levy and collect appropriate sales tax can cause severe fines and penalties including loss of sales tax license and business license(this includes not having sales tax licence).

    “Finally it would be very hard for the government to predict tax revenues under such a system. If food prices shoot up (as recently) then there would be less money sloshing around to be spent on goods subject to sales tax. Smoothing these peaks and troughs would be a tricky task.”

    This is a problem that many state and local governments face, there are some very advanced sales tax prediciton models being used by various treasurers. These models use quarterly sales tax payments from retailers to the treasury from previous quarters, and some other economic data that I am not totally aware of to predict revenue.

    Thus budgets set by legislatures (Parlament in your case), are generally flexible. This means that in the case of the State of Arizona, if the treasurer sees a trend of declining revenue, the govenor will work with the legislature to adjust the budget. In some cases the govenor will instruct various agencies and secretaries (ministers in your case) to start looking for ways to trim the budget.

    Another way government bodies cope with the swings is by creating reserve funds. This fund is not used unless there is a shortfall in tax revenues, and is funded when there is a surplus created by higher than expected tax revenue. If your politicians are anything like our politicians, any unspent money is considered a vote not purchased (sarcasim), and thus there are local councilmembers who have gotten into political (and legal) trouble for trying to tap these reserve funds when no shortfall is evident.

    Sometimes the cuts made due to revenue are not popular, and thus the people make changes to funding without the legislature being involved. One notable shortfall here, the legislature cut funding to local schools. The people we extremely upset, and put forth a ballot initiative that raised our sales tax by .5% (it passed with over 75% of voters in favor). The initiative made it legally impossible for the legislature to touch the funds raised by the sales tax increase, and now our schools are more secure in their funding than ever.

    Thanks for the welcome by the way!

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  • 90. At 7:31pm on 03 Sep 2008, enneffess wrote:

    Some people seem to be missing an important point:

    The SNP (if I am right) expect HMRC to provide the details. Fair enough. What happens if Scotland becomes independant?

    An entire new "Scottish" HMRC will have to be created, and at immense cost.

    I work in an operation where details are already collect in a similar size of setup as the proposed LIT, and that can barely cope. Many errors are made and trying to keep tabs on someone's current employment can be frustrating to the point of distraction.

    3p in the pound sounds great. But in own situation I would be saving about 900 pounds a year. Fantastic! But that means 900 pounds less for council (albeit limited) services.

    Where is the shortfall going to come from?

    I think Alex has finally made a mistake.

    And he cannot blame anyone else for it.

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  • 91. At 7:34pm on 03 Sep 2008, one step beyond wrote:

    Re post, the 280 m from Government funds you mention. I take it then that money was not meant for anything. It was not ear marked for the health service, care of the elderly, schools. It was just lying around in a draw some where? You would prefer it to be spent to subsidise what may be quite wealthy people and second home owners.

    Here is an idea, if that 280m is going spare use some of it to provide support to those pensioners with only the state pension to live on, who are stuggling with the council tax. A much easire thing to do, you would probably get a lot of change.

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  • 92. At 7:41pm on 03 Sep 2008, enneffess wrote:

    Apologies for posting twice on the trot!!

    I have just read post No 75.

    Why can't the SNP go for a sales tax?

    Or would EU law on VAT scupper that one?

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  • 93. At 7:46pm on 03 Sep 2008, Colkitto wrote:

    Very disapointed the Holyrood Live FMQ's is not getting an hour slot or even equal coverage as PMQ's at Westminster.

    Poor show BBC Scotland !

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  • 94. At 7:49pm on 03 Sep 2008, Tom wrote:

    #91.

    It depends how you see the issue. I support LIT because I see LIT as a tax cut, which will result in less services or resources being moved from other parts of the budget to support the councils.

    Most would object immediatly, however I am thinking of the wider public. Rising costs are effecting families and a lower tax would help them recover, especailly after the 10p tax mayhem Labour caused (still causing).

    The only problem LIT has are the loop-holes that the wealthy can afford to use. If LIT were to happen (very unlikily) then I hope the SNP ensure that everyone pays and no one can hide.

    Personally, I would rather move money from supporting the unemployed to LIT then those who don't want to work, don't have to but will find living very difficult. Of course, the Nats don't control that part of our countries finances (I don't think?) but I am sure something could be done to ensure LIT actually helps those who pay into it.

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  • 95. At 7:59pm on 03 Sep 2008, oldnat wrote:

    #89 Amusedyank

    From me also, welcome to the blog.

    A problem any country has is being too introverted, and not looking at what happens elsewhere. The USA has a wide range of different taxation systems - state to state (even county to county) and those people on this side of the pond who are terrified of marginal differences across national boundaries should look at the relatively minor problems that exist near the border between Oregon and Washington.

    Your comments are useful, insightful and of value in our debate. Keep the observations coming.

    You other guys - like Brownedov, I have some work that needs doing (so I can pay my taxes). I'll visit when I can (or if the work is boring me stupid).

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  • 96. At 8:05pm on 03 Sep 2008, Older than the Pyramids wrote:

    #84, xjonboy

    "And what if you work in Scotland and live in England? You would end up paying twice - Scottish income tax and English council tax."

    And, presumably, you could live in Scotland (paying no council tax) and work in England (paying lower income tax).

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  • 97. At 8:26pm on 03 Sep 2008, U11769947 wrote:

    jordanbasset

    Great post's, you do make some very pertinent points pertaining to the doomed LIT.

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  • 98. At 8:39pm on 03 Sep 2008, one step beyond wrote:

    Re post 94, I think I see where you are coming from. But my understanding is that even the unemployed currently pay council tax, while they will not pay LIT. So the unemployed will be better off under LIT compared to council tax. Unless you think the 280m will be made up by reducing unemployment benefit, if so I have not seen this in the SNP announccement.

    The ones who will be worse off are the hard working familes who have to stay in the same house because they cannot afford to move out. If figures are right and the LIT will be 3% of salary, then a family of four each earning on average 17,000 GBP (64,000 in total) will pay a total of 2040 GBP. Current average council tax is 1000 GBP, that hard working family will be 1040 GBP worse off.

    Mean while the English second home owners next door, who use the property as a country retreat and for the shooting season pay nothing.

    None of this matters as it will not happen, it is merely a very clever and cynical move by the SNP to make the other parties and the London Parliament look like the bad guys.

    I so hope they call Alex Salmond's bluff and let him wallow in misery of his own making.

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  • 99. At 8:42pm on 03 Sep 2008, one step beyond wrote:

    Re post 97, thanks Derek, appreciate it, believe this could be the first big mistake Alex Salmond has made IF the other parties let him do it. Think I will shut up for now though - take care

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  • 100. At 8:57pm on 03 Sep 2008, U11769947 wrote:

    Re post99

    The phrase "SPECTACULAR O' G" does spring to mind.

    Continue, it's spot on. (right and proper)

    Cheers.

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  • 101. At 9:10pm on 03 Sep 2008, Tom wrote:

    #98.

    How can the unemployed pay council tax? How can the unemployed pay anything?

    "Mean while the English second home owners next door, who use the property as a country retreat and for the shooting season pay nothing."

    Of course. One flaw that would have to be taken into account for LIT to be successful.

    "None of this matters as it will not happen, it is merely a very clever and cynical move by the SNP to make the other parties and the London Parliament look like the bad guys."

    It could well happen still. We can only hope that the flaws are taken into account and matters are put into place to correct them. LIT could be the best thing since sliced bread, we only need more effort to ensure it works.

    Does anyone know what Labour have offered as an alternative yet? Or is it all talk and no action from them lot?

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  • 102. At 9:16pm on 03 Sep 2008, Older than the Pyramids wrote:

    With the Scottish parliament having delivered democratic accountability to Scotland's services, do we NEED 'local' authorities at all?

    Imposing PR has removed any residual notion of a link between constituent and councillor, and is something for which the LibDems should never be forgiven.

    Doing away with the gravy train of council-life - notice how many council leaders (having once professed a desire to serve their ward almost to their dying breath) say "See ya" as soon as any MSP/MP job is in the offing - would save a fortune in unnecessary bureaucracy, and would probably be unnoticed by the people.

    As to losing 'local' accountability (although in some cases hardly any less remote than Edinburgh), I hold in higher regard appointed officials - doing a professional job and helping deliver a needed service - than self-important councillors, who merely TALK about such services.

    And the upshot would be that the LIT's collection and disbursement areas would be identical.

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  • 103. At 9:39pm on 03 Sep 2008, rabbiehippo wrote:

    #90 Neil i asked that question at #17 but to no avail . I would imagine we will need our own customs and excise and also our own dvla .... admittedly costing money but i suspect this has been worked out long ago .... i know the SNP are trying to cut down on a lot of wasted spending thats been going on for years . ie the useless PFI's that hospitals are trying to get out of at great cost.

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  • 104. At 9:42pm on 03 Sep 2008, rabbiehippo wrote:

    Oldnat .... good to see im not the only one skivving of my work on here lol

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  • 105. At 9:50pm on 03 Sep 2008, iamrightok wrote:

    i personally can't wait to pay more "LIT" than my next door neighbours, who could potentially earn less and use more government services than the 2 of us;

    2 decent incomes in the 1 house to tax versus say 2 retirees, or 2 people who maybe have kids working less hours so earn less (and who probably get some sort of tax credit for doing so)... Great, incentive to reproduce if nothing else...

    personally i have absolutley nothing better to do with my money than subsidise those who work less, or don't work, or are "incapacitated"... can't wait.

    i'm off to make my appointment with an emigration expert.

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  • 106. At 9:50pm on 03 Sep 2008, Blogpolice wrote:

    Labour have a lot to answer for. Devolution - one chamber - no check and balance = stupid laws - and nobody thinks of the consequences.

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  • 107. At 9:52pm on 03 Sep 2008, Older than the Pyramids wrote:

    #17, #90, #103

    Given the propensity for UK government departments to incompetently manage data, I think it would be no bad thing if we started from scratch - rather than taking over any part of the existing UK structure which happens to reside in Scotland.

    Anyway, any computer system is more likely to cope well with a population of up to 6 million than with one 9 times greater.

    --

    It is gratifying, however, that the bulk of the postings treat independence (desirable or otherwise) as inevitable.

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  • 108. At 9:56pm on 03 Sep 2008, Older than the Pyramids wrote:

    #105, iamrightok

    You make the perfect point as to why LIT is fairer - it is related to THE ABILITY TO PAY!!!

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  • 109. At 10:06pm on 03 Sep 2008, Dave McEwan Hill wrote:

    This comment was removed because the moderators found it broke the House Rules.

  • 110. At 10:06pm on 03 Sep 2008, iamrightok wrote:

    Totally disagree Forfarian.. why is it fairer that I should pay more than someone else just because I earn more? ?! A very basic taxation argument I realise, but its as simple as that really.

    I worked to get where I am so that I could enjoy the benefits, not someone else, .. where is the incentive for the population to earn more/generate income/boost the economy?

    Certainly puts me off earning more if its not going to make its way to my bottom line.

    Maybe I am just being harsh not wanting to carry the can for others, but frankly ive been doing it for years and this is just another slap in the face. (with a Salmond).

    Ability pay ususally means earns more. Earning less seems to be the incentive here, which isn't really going to help our economy is it.

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  • 111. At 10:12pm on 03 Sep 2008, cynicalHighlander wrote:

    There are people decrying LIT and others seeing it as a way forward, surely any movement from the Council tax has got to be a good thing to start to redress the balance of wealth.

    I have been playing around with the link courtesy of #26 just to see how different scenarious play out and the winners seem to outnumber the losers, but one has to remember these losers are the ones who have been the winners in the past. This might be because of the rural location I live in.

    Holiday homes I would suspect will have to be dealt with as a separate entity as in general they contribute nothing to the local economy yet make use of the local infastructure and deny locals an affordable abode.

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  • 112. At 10:20pm on 03 Sep 2008, iamrightok wrote:

    another point.. Councils are stuggling as it is to collect Council Tax and get their revenue in.. i really don't think they are ready for this sort of responsibility. .. if they are going to be asked to do this (as i believe is one of the options especially if independance does come (as above, no HMCR)..... significant investment will be required in their IT infrastructures and back office abilities..

    Also, how will it work LOCALLY in areas where say there are a high density of pensioners or low earners... will there be any support for these areas to be "topped up" from other, more affluent areas?

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  • 113. At 10:39pm on 03 Sep 2008, enneffess wrote:

    107. At 9:52pm on 03 Sep 2008, The_Forfarian wrote:
    #17, #90, #103

    Given the propensity for UK government departments to incompetently manage data, I think it would be no bad thing if we started from scratch - rather than taking over any part of the existing UK structure which happens to reside in Scotland.

    Anyway, any computer system is more likely to cope well with a population of up to 6 million than with one 9 times greater.
    ----------

    The system I was describing deals with a similar figure to 6 million. While a new system from scratch is attractive, who will provide it? Yep, probably the old favourites who will charge a fortune and take years to deliver. And from personal experience I do not want my Council to have even more of my details.

    It is more complex to set up even a small system than you may think. Not only does it need the programming for starters, you also need advisers to deal with the inevitable enquiries, and experienced staff likely to be working for HMRC already. But where do you locate it?

    The principle of LIT sounds fine, but it is giving the impression to many people that only one person in the house will pay, rather - and correct me if I am wrong - than the highest earner.

    If it is true that all taxpayers will have to pay, then the media will turn this into "Alex Salmond's Poll Tax". So I think he has for once shot himself in the foot. Many households, even with sensible mortgages etc are still right on the edge due to high living costs.

    Looking more into sales tax, I think it would be a good idea. You pay for what you use. Apply the same to road tax etc.

    One other point: water rates are added to your Council Tax bill. Are they going to go up to make up any potential shortfall?

    One thing the SNP might be gambling on is if the legislation is passed, Westminster will remove the current grant Scotland receives. That of course plays straight into SNP hands.

    On his other proposals, all for the age limit raised to 21 for off-licences. But why the hiding of cigarette displays? It will not make any difference. Spend the money on hard-hitting adverts instead.

    And for once can someone try and deal with the alcohol culture in this country?

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  • 114. At 10:46pm on 03 Sep 2008, Jake-the-S wrote:

    It surprises me that so many are against LIT.
    Lets look at it. A family of four where only one parent works pays the 3p or whatever.
    That one parent is paying for all the bills including the LIT.
    The family is using services provided by the local council and only one is paying how unfair!! But wait, 15 years later the same family living in the same house are all working and are all paying LIT. They get the same services for four times the price oh how unfair!
    Its swings and roundabouts and we have to pay for the services we are provided with and want. There is no use in moaning about it.
    I think this would be a fairer system than paying a tax on bricks and mortar.
    If you don't want to pay taxes go away and live somewhere you don't have to pay and see what services you get.

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  • 115. At 11:07pm on 03 Sep 2008, Derek_Paterson wrote:

    I think some form of local income tax is indisputable - council tax is unfair and needs to be changed.

    No matter which side of the independence debate you are on, for Westminster to turn around and effectively say "it's our way or the highway" and take £400m away from Scotland would be political suicide!

    If there's one way to play into King Alec's hand, it's to give him a bunch of p*ssed off Scots made poorer by Westminster's stubbornness.

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  • 116. At 11:07pm on 03 Sep 2008, Jake-the-S wrote:

    Did all the people blethering on about HMRC forget Centre 1?
    Don't think setting up a new Scottish Tax Office would be a big problem as there is one in situ.

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  • 117. At 11:27pm on 03 Sep 2008, British_Lion wrote:

    A local income tax of 3p in the pound? Okay, the way I see it that means that the harder you work and the more money you make, the more you pay.

    So this excess money you're paying in LIT is used to fund freebies for those who earn less and, worst of all, those who can't be bothered working?

    I don't see how this is fair if it makes the hard working population worse off at the behest of those who scrounge. That is standard Westminster Labour policy and Salmond has copied that? I thought he was marketed as something different?

    It doesn't seem fair but time will tell, Salmond will enforce this regardless of what people think of it.

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  • 118. At 11:40pm on 03 Sep 2008, Ben_Lomond wrote:

    Another year, another First Minster's statement on his government's legislative programme. Another lesson in how limited are the powers of the Scottish Parliament under the present devolution arrangements. Every time there is such a statement there is in effect a display of just how short and how tight is the leash, how limited the scope for action, how far we are from freedom of action.

    A bold and competent administration such as the present Scottish Government shows us how much more can be done by our parliament and government if we return the SNP to power with a majority at the next Holyrood elections and increase SNP representation at Westminster to press for greater powers for the Scottish Parliament. Plainly we would have self-government worthy of the name, either inside or outside the UK, if our government had the freedom to tax and borrow that even the provincial governments of Canada enjoy. In an economic crisis such as the Chancellor of the Exchequer has recently described, our government desperately needs those powers to protect and stimulate our economy. Without those powers we are subject to the failings of a remote government in London which has lost the confidence of both England and Scotland and which is demonstrating nothing more ably than a capacity for making the economic situation worse rather than improving it.

    It is at least comforting to know that the party which is most capable of making the most of the limited powers that Labour's devolution scheme has permitted Scotland to exercise on its own behalf is the party which is currently in office and likely to remain in office for the foreseeable future.

    As for LIT, which is the focus of attention now, there is obviously no majority for the SNP proposals, and there is unlikely to be a majority for any form of Council Tax replacement before the next Holyrood elections, unless the will to replace the Council Tax is strong enough across the parties to induce them to cooperate to devise a form of local-government finance which can be supported by a majority in the present parliament. That would be an achievement greater than one could reasonably expect. However, it may be that it is not to be ruled out until the Labour group has a new leader and that new leader has charted a course for that group, assuming that whoever is elected to that position will prove to be capable of doing so.

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  • 119. At 11:43pm on 03 Sep 2008, rabbiehippo wrote:

    I doubt if any of the anti LIT bloggers will have thought about it but .... if i were in government and had just released my manifesto for the next year, id be checking out blogs like these to see what feedback there is. I agree with 79 in that Alex is a lot cleverer than most give him credit for and some of the points suggested here will be worked on before voting time .

    #65 lol Kellogs Cornflakes ... brilliant.

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  • 120. At 11:47pm on 03 Sep 2008, rabbiehippo wrote:

    Oldnat ...where are you .... if your struggling with some of the more complicated words in the Scottish Governments Program ill help you out ;)}

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  • 121. At 11:49pm on 03 Sep 2008, falkirkblues wrote:

    A LIT is a fairer system and knowing Alex salmond he is on a winner either way. The public overwhelmingly want Council Tax scrapped so there will be a LIT, if not the other parties WILL pay the price at the next election, wee Eck shrewd if nothing else

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  • 122. At 11:53pm on 03 Sep 2008, enneffess wrote:

    114. At 10:46pm on 03 Sep 2008, Jake-the-saltire wrote:

    If you don't want to pay taxes go away and live somewhere you don't have to pay and see what services you get.


    Fair comment. However, Councils need to be more efficient. Go past any Council headquarters at night and look at the amount of lights on.

    My own council is having to spend millions - again - on repairs to the local swimming pool. They MUST pay for these, since some numpty managed to get the pool classed as a Grade 2 listed building! The pool is about to close for over a year, and the repairs will not last more than 5-10 years. The Council is legally bound to fix the building, yet we now have a reduction in services but higher costs.

    One only has to look at Aberdeen to see how things can go wrong very quickly.

    Councils these days are very good at selling off land, but poor at maintaining what is left.

    Perhaps the Scottish Government could propose legislation to make council managers and leaders more accountable for decisions they make.

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  • 123. At 00:03am on 04 Sep 2008, Slithytove wrote:

    Council Tax revenue accounts for less than 25% of the total income that Councils receive. Even if the proposed LIT only raised two thirds of the income raised by the Council Tax, as some have claimed in comments above, then that would amount to a shortfall of around 7% in council budgets. That is still a significant shortfall, but it is hardly a deal-breaker when you consider that its an absolutely worst-case scenario.

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  • 124. At 00:56am on 04 Sep 2008, Alasdair_McGray wrote:

    Dark skies over Europe if Scotland does something different from England. We are all going to hell in a hand cart.

    All the unionists are united in one voice, that of Sergeant Fraser in Dad's Army. They see doom and gloom in everything and hanker back to the good old days of Jim C or Mrs T.

    The lack of confidence some Scots have in our own ability is the single biggest factor in our failure to progress and make our way in the world like other nations.

    The change to a fairer local income tax from the discredited council tax is a step in the right direction for Scots to gain self belief in their actions.

    This is the fundamental reason Scottish regional Labour is against the change, plus they did not have the imagination or bravery to come up with a policy that is fair and equitable. Regional Labour will oppose this at every turn, Bungler Brown taking a leading role no doubt.

    Well done SNP, lets hope you can garner votes from other parties for this exciting and meaningful change that will benefit those Scots less well off.

    Which party would you rather put a cross against in the referendum voting booth, a national party prepared to implement imaginative policies and places Scotland first or a regional party that wages illegal wars and places Scotland second?

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  • 125. At 01:57am on 04 Sep 2008, rabbiehippo wrote:

    #122 That last bit ... you should make that the Uk government going by all the dodgy things ive heard about -Donnygate springs to mind

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  • 126. At 06:17am on 04 Sep 2008, Older than the Pyramids wrote:

    #117, British_Lion

    "Okay, the way I see it that means that the harder you work and the more money you make, the more you pay."

    ... and the more money you make, the more more you keep.

    Like Income Tax itself, or indeed any of the very many taxes based on a simple percentage of income, expenditure, etc., the proportion you keep is unchanged.

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  • 127. At 08:10am on 04 Sep 2008, one step beyond wrote:

    I am surprised at some of the posts who gloss over anomalies and loop holes with phrases such as 'will be worked out before voting time'. Such confidence in the SNP is truly inspiring, wish I shared it.

    To recap the 'loopholes' are

    1. Second home owners will pay no tax on those homes. People will be aware the consternation that second home owners were only paying 90% of council tax on these homes. What will happen when they pay no tax at all. What will happen to the small rural communities whose children cannot afford to buy in the area when they see persons from outside Scotland snapping up these properties in the knowledge there is no council tax to pay.

    2. Those very rich people (non domicile status is the term I believe) who own very large proerties but do not pay income tax, but currently have to pay council tax. Will people really be happy about that.

    3. Those people who live in Scotland but work in England. They will not pay any tax in Scotland. This group is likely to increase with this incentive saving them around £1000 per year.

    4. Conversely those living in England and working in Scotland will pay twice, is this fair?

    To dismiss these as anamolies that can be worked out is incredible to me. The SNP has not addressed dealing with these anamolies, they have even failed to recognise they exist. Talk about thinking up a plan on the back of a fag packet. If the proposals specifically addressed these points I would at least think the SNP considered the issues.

    The only way to sort out these anamolies would be to keep the dual process of council tax and LIT running. This would be incredibly expensive and in addition would need a small army of snoopers to work out which were second homes, whether people worked in England or Scotland etc.

    The lost revenue is not a small amount of money, as a previous post of mine pointed out it is £100 million just for second home owners. When you factor in non domiciles and Scottish rwesidents who work in England you could easily double that. That figure is likely to grow as people take advantage of this unfair tax system on the hard working people of Scotland.

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  • 128. At 08:33am on 04 Sep 2008, Older than the Pyramids wrote:

    If you want LIT to be simple to understand and simple to administer, there will naturally be anomalies.

    By the time it comes into force, as I am sure it will (if only so that the other parties can blame the SNP if it goes wrong and thereby hope to (re)gain power at the following election), there will doubtless be so many exceptions and exemptions that the Council Tax staff who would otherwise be redundant will probbly have to be augmented in number to make sense of it all.

    Unless we let the computers take over our world...

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  • 129. At 08:49am on 04 Sep 2008, rabbiehippo wrote:

    127 how do you know the SNP are oblivious to all those loop holes you just pointed out ... they only just announced the program yesterday. I doubt they are sitting with their fingers in there ears ... the SNP has a lot to loose if they mess up ... unfortunately something Labour and the Tories seem to have gotten away with for years.

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  • 130. At 09:41am on 04 Sep 2008, Bangingonabout wrote:

    #129

    They may have only announced the program yesterday but they've been talking about it since before the election.

    On the assumption that they had thought this through properly, I would have thought they would have answers to hand when issues like "What about second home owners?", "What about people who live in Scotland and work in England" and "What about wealthy people who pay no income tax" are raised.

    They don't seem to be answering these points so either:

    1) They didn't think about them
    2) They did think about them but think it doesn't matter. In which case I'd like an explanation as to why they don't matter.



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  • 131. At 10:11am on 04 Sep 2008, MannyGee wrote:

    I live in Luxembourg where we have pretty much the same system as LIT. We pay income tax and a share of that goes to your local commune (council) to pay for the services.

    When you get your wage, no extra tax to pay afterwards which is less hassle and less demoralising since you're only paying tax once off your wage.

    As a relatively high earner I will be contributing more than those on lower incomes. Do I grudge this? Not at all, the money goes to my local commune and pays for the local services. The more money the commune gets, the better the services they can provide, which for the record, are far superior in my experience to those provided anywhere I've lived in the UK.

    Branding LIT as unworkable is nonsense, other countries are using it and using it more successfully than the UK's implementation of Council Tax.

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  • 132. At 10:23am on 04 Sep 2008, one step beyond wrote:

    Re post 130, absolutely right.

    Re post 129 your blind confidence and or loyalty is amazing to me. Think back 20 years, the tories about to impose the poll tax on Scotland. A blog similar to this appears. People rightly point out the basic unfairness of it. The tory equivalent of you pops up and says

    ' how do you know the tories are oblivious to all these loop holes ...
    I doubt they are sitting with their fingers in their ears... the tories have a lot to lose if they mess up'

    Give me a break, the problems with the poll tax were obvious, as obvious as the problems with this ill thought out piece of electioneering


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  • 133. At 10:34am on 04 Sep 2008, Aberdeenbill wrote:

    TUAIRIMIOCHT:

    I don't think you grasp the concept of working hard for a living!! Why should someone on a high salary who has worked hard to get that high salary be forced to pay more for the same services as someone on benefits who chooses to be on benefits.

    I beleive the answer lies in privatisation of more services and that we all should pay as we use. Whats wrong in renting a library book instead of borrowing it. (It may get returned that way). There is nothing wrong with the council tax system but it does need refreshing.

    Mr Salmond still needs to get a life by the way!!!!Have you seen the size of his house in the country???

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  • 134. At 10:52am on 04 Sep 2008, rabbiehippo wrote:

    #132 Actually when the poll tax came out here i went to London to work .. i wont be doing that now.

    #131 maybe you can answer some of the questions that the non believers want to know.

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  • 135. At 10:54am on 04 Sep 2008, rabbiehippo wrote:

    130 Who has been asking them those questions .... people on the news or just people on this blog ..... forgive me if ive missed something i dont watch much tv . Just because they havent answered doesnt mean that there are none.

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  • 136. At 11:13am on 04 Sep 2008, Bangingonabout wrote:

    #135

    I believe that some of these points have actually been made by the opposition parties in the past year in the parliament when the subject of LIT has been raised.

    They don't get answered. Just a load of bluster about "replacing the discredited Council Tax with a fairer system"

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  • 137. At 11:21am on 04 Sep 2008, MannyGee wrote:

    #133. Aberdeenbill wrote:

    "Why should someone on a high salary who has worked hard to get that high salary be forced to pay more for the same services as someone on benefits who chooses to be on benefits. "


    People on high salaries tend to live in more affluent areas where most people are on higher salaries.

    People on low incomes tend to live in poorer areas where most people are on low incomes.

    The 3% you pay goes to your local council to pay for services. If you and the other people in your area are high earners, paying more than those in the poor areas, then your council will get more money and be able to provide better services.

    Poor areas, on the other hand, won't have such good services since there won't be as much money getting paid in LIT.

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  • 138. At 11:34am on 04 Sep 2008, Dave McEwan Hill wrote:

    131 Manny Gee

    Exactly!

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  • 139. At 11:36am on 04 Sep 2008, one step beyond wrote:

    Re post 131. I am aware Luxembourg is used as a tax refuge for many of the super rich and did have a tussle with the E.U. about witholding tax.

    But always thought tax in Luxembourg is payable for local services and vary between 0.7-1% per annum based on the official value of the property. Has this changed?

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  • 140. At 12:07pm on 04 Sep 2008, Bangingonabout wrote:

    #138

    You might want to read #137 and see what's implied.

    "Areas with high earners...will provide better services"....."Poorer areas won't have such good services"

    So areas with low earners don't get a library then, or maybe no social workers, or maybe some other provision that people require. Whereas areas with large earners, get swimming pools, leisure facilities, etc.

    MannyGee seems to have a very simplistic view of how councils in Scotland are structured and funded.

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  • 141. At 12:09pm on 04 Sep 2008, DunkyR wrote:

    #133
    And privatisation has really improved everything? I wouldn't say PFI really has benefited the health system. The problem with Privatisation is that it often involves PLcs where profits aren't automatically re-invested. I believe that Co-operatives do re-invest first and then take some profit. Would you say that the privatised railways, solution from the 90's, are really a good form of public transport? Using them regularly I have seen improvements but so much as a trickle that I can't see that investment in a regionalised national service wouldn't have done either.
    Generally:
    I always thought the council tax did pay for services and that LIT would also. Surely it could work along the same lines as if you paid council tax by DD. If there is a good form of LIT that works in Luxembourg maybe that should be adopted. The thing about 3% is that it is 3% for everybody so the impact is the same. Yes bigger earners pay more money but it will still only be 3%. But it should be up to councils to decide on what margins to use in their own districts as technically councillors should know their wards and know what would be reasonable % for their wards earners.
    The maths is probably problematic but not impossible and as soon as you can write a function in a programme you can calculate the amounts easily.

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  • 142. At 12:31pm on 04 Sep 2008, william1957 wrote:


    Brian,

    One of the best blogs in ages, actually getting to grips with what is important in politics: money and who pays. Below are a few relatively unrelated points I would like to make.

    I think one of Neil Small's points @113 is worth considering: the water charges. If these are not included in the calculations we are not looking at a 3% charge, but 3% plus water charges makes things look a bit different. Add in second homes, no contribution from those whose income is derived from unearned sources, the unemployed, and those on sickness benefit, and this whole idea begins to look like a big hit on working families who are already struggling.

    In a similar vein, under LIT council incomes would only increase if salaries increased overall. The 3% limit puts a ceiling on the amount of tax that can be raised from the total earned income of the country’s workforce. If a recession occurs, this falls and lowers the amount available to councils just at the time when it is needed most, much like the situation national governments face in recession. If cuts in services are excluded, any shortfall would have to come from other areas of taxation such as on corporations, which would make Scotland a less likely candidate for inward investment, or additional taxes on private expenditure, such as sales taxes.

    My next point is this. The average family income in Scotland is around £53000. The average Council Tax is £1270. This means average Council Tax in Scotland is running at 2.4% of average joint family earnings. Those who support LIT claim it is fairer than Council Tax; not if these figures are correct. The SNP's present proposals would entail a 25% rise in average taxation towards Council Services while acknowledging the amount raised by LIT would not cover present expenditure without the additional £400 million from Westminster. I know using averages is not a good idea for detailed analysis, but if my figures are correct something does not add up with the SNP plans.

    Don’t get me wrong, I think the issue of how we finance our local services is important, but I think there are too many holes in the LIT proposal at present to make it viable without hitting working families harder than at present. In addition, I return to something I have raised in past blogs. For me the issue is not so much how we pay for our local services, but what local services are actually necessary, and what level of funding is required to support them. This gets lost every time the Council Tax/LIT debate starts.

    Best Wishes,

    William1957.

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  • 143. At 12:33pm on 04 Sep 2008, brigadierjohn wrote:

    Once people realise that "scrapping" a disliked tax actually means replacing it with another (which will come to be disliked) support for LIT will evaporate. When the penny drops that LIT won't raise enough to meet existing requirements, but will require increases in the costs of many other services, people will feel they've been conned.
    Gordon Brown has been rightly condemned for boasting about prosperity and prudence while imposing ever increasing "stealth" taxes. What stealth taxes will Salmond have to impose to replace the "missing" one-third of Council Tax revenue?
    LIT is being touted as a wonderful benefit for Scots and the end of Council Tax. But it seems we are talking about approximately 500 pounds a year for the beneficiaries, before the extra bills bite. Economical with the truth or what?
    At the end of the day it doesn't matter what you call a tax, or the basis of its imposition, it's the overall effect on people that counts.
    If it suddenly costs 20 quid for a hitherto free rubbish uplift, or five pounds to visit the baths, where is the overall benefit? As for the anomalies, it will take 20 years to sort them out.
    This proposal is a pig in a poke, and its only justification seems to be that when it collapses, as it must, Salmond can say: "See, the big bad Unionists did it and ran away."

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  • 144. At 12:51pm on 04 Sep 2008, MannyGee wrote:

    #139

    There is a census each year in which we declare how many people are living in the property, where you work, what you do, how much you earn etc. Then a few months later they send you your tax card for the year, you give this to your employer and that lets them know which tax bracket to put you in.

    I've been here 6 years, the first 4 renting and then bought a place 2 years ago.
    There's a property tax when you buy (although I was exempt as a first time buyer) but this is a one off tax.

    I've never had to pay an annual tax towards services, however, there are some services which we pay for such as water (there's a meter in the house to measure how much you use) and bins (this is calculated by weight apparently).
    Water and electricity are still run by the state and are included in a single bill, the bins are paid once per year by the company that manages the building (the residents pay a monthly fee to the management company to cover the bins, maintenance, heating etc.)

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  • 145. At 12:58pm on 04 Sep 2008, bingowings87 wrote:

    Let's not forget, the 400-odd million Council Tax Benefit that the SNP say they need to make this work, is needed IN PERPETUITY. So what happens come independence?? No CTB, so let me think....lets call it another 2p on the tax rate? "Stealth Tax", I think you call it.

    Besides, the principle of relying on CTB for me is wrong. When an unemployed person finds work, their benefits reduce since there is less need for them. So, if the SNP scrap the reason for CTB being needed, why do they feel entitled to claim it? The term "subsidy junkie" springs to mind.

    Finally....why do the SNP insist on calling this LIT? The very last thing it is, is Local. The SNP should stop treating the Scottish people like fools, and admit that their plan is deeply flawed and unsustainable.

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  • 146. At 12:59pm on 04 Sep 2008, MannyGee wrote:

    #140

    My example was in fact how it works in Luxembourg, not Scotland.

    As regards poor areas in Scotland, this is where the 400m block grant comes in. It is currently there to compensate for the low earners. If the grant is still there then the poor areas receive a boost to their funding to make up for the shortfall in LIT

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  • 147. At 1:12pm on 04 Sep 2008, darwinsmonkey wrote:

    Well according to the calculation (see #26) I'll have to pay 50% more as a middle income earner who has dependents who don't live with me and owns a tiny property in an impoverished region of Glasgow. Time to retire or move to Berwick.

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  • 148. At 1:14pm on 04 Sep 2008, noblewilliamw wrote:

    The "LTI" is just more political double speak. I wholeheartedly agree with those who point out that there is nothing "local" about it. It is a Scottish nation wide tax plain and simple.

    It is presented as a solution to the Poll Tax but in reality it is nothing more that an attempt to exercise the right under devolution to vary the rate of INCOME tax by 3%. (Remember this from the devolution election material!)

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  • 149. At 1:51pm on 04 Sep 2008, northhighlander wrote:

    Re 127 jordanbasset

    Good post there are other loopholes that needlooked at as well.

    If the tax is levied at a uniform rate over all of Scotland than those of who live in areas away from the central belt will subsidise services for those who live in the central belt, as these areas have greater levels of public services costing more.

    The collection scheme for water and sewage bills will need to be only for water and sewage as opposed to the current share with local government. This must be less efficient and more costly.

    In addition why does it not matter that people don't pay for water and sewage based on their ability to pay?

    Also where is the 280m shortfall coming form? El presidente waxed lyrical about embezzlers and all the rest yesterday but could not answer this basic question. Which services are to be cut to pay for this "tax cut"

    I think the level of detail shown yesterday indicated that this debate is not about seriously replacing the council tax it is about playing political games . This half baked idea will never happen, Salmond knows that he is just playing a shameful game of politics to further his independence aims.

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  • 150. At 2:31pm on 04 Sep 2008, one step beyond wrote:

    Re post 149, at the risk of this becoming a love in, you are spot on. What services are going to be reuduced to provide the 280m shortfall

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  • 151. At 6:06pm on 04 Sep 2008, tuairimiocht wrote:

    "I don't think you grasp the concept of working hard for a living!!"

    Irrelevant and untrue.


    "Why should someone on a high salary who has worked hard to get that high salary be forced to pay more for the same services as someone on benefits who chooses to be on benefits."

    Because of the marginal utility of money. One hundred pounds is less useful to a millionaire than to someone on the minimum wage. That is the basis of progressive taxation.

    Moreover, the notion that council tax is a charge for local services is a bit of a myth really. Council tax is a tax, not a charge for services used. People without children pay council tax which funds schools that they may never avail of. Likewise, council-taxpayers might never use any of the social services they fund. This seems very similar to the principle on which income tax is based, suggesting that council tax and income tax be viewed in the same light.

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  • 152. At 11:33pm on 04 Sep 2008, funkiestmunky wrote:

    These plans are flawed for a number of reasons.

    This is not a local tax, nor can it be. HMRC are only committed under the Scotland Act to collect one varied rate for taxpayers residing in Scotland.

    3% across Scottish taxpayers who would be eligible does not cover the current Council Tax funding. Where will the additional funding come from and cuts be made? As council running costs increase (and tax revenues are likely to fall if we enter a recession) how can this 3% be added to? The Scottish Government cannot increase the % as it will be fully utlising the 3% variation it has in it's power under the Scotland Act.

    If I register my taxable in England but have properties in Scotland surely I won't pay. How will this be managed to avoid tax evasion.

    The change would mean middle income families would be hardest hit. For example, a tax-paying child still living with parents would all pay 3% of their incomes - this surely doesn't reflect the shared services the family receive at one property (rubbish collection, use the same local ammenities etc).

    I could go on.... but as I am happy to continue paying my English Council Tax which would leave me better off (though I do think rebanding and improvemens could take place) I won't.

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  • 153. At 2:06pm on 05 Sep 2008, Vinanglais wrote:

    Brian, Local income tax, just another SNP attempt to differentiate Scotland a part of Britain from the rest of the country and what a minefield they are stepping into. Do they remember the poll tax, not the original one but when Thatcher tried this, this would be a far worse version. 3p in the pound could result in very high bills for many voters and the SNP already in a minority position would be consigned to opposition. The other part they seem to have overlooked is that folks will enhance their tax avoidance measures to lower their tax bills and certainly central UK government will come first in the revenue queue leaving the SNP with a serious hole in their budget, after all right now the money is collected in Scotland by local authorities, income tax is a central function and the money won't go direct into the bank account. If it ain't broke don't fix it they sometimes say, move the goalposts on benefits to help balance the burden between well off and less well off, anything else will surely lead to trouble.

    Paul

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  • 154. At 1:07pm on 10 Sep 2008, Anglophone wrote:

    Superficially, income tax is always preferable to other mechanisms as it reflects the "ability to pay". The devil of course lies in the detail as admirably pointed out by many contributors on this page

    My suspicion is that this is not intended to come into effect at any time soon. Rather it is just another of Wee Alec's stunts to pick a synthetic fight with central government over "our money" and the refusal of the wicked Treasury to hand it over to AS so that he can ride through the streets distributing alms to the poor and needy.

    I find the notion put about in no 31 by the Forfarian (my favourite no-hoper football teams by the way) that LIT will succeed due to the moral superiority of Scots in their willingness to pay more tax to benefit the less well off rather funny. Presumably the horrid English who are content to leave widows and orphans starving in the street, never have such altruistic ideas.

    I will readilly admit to earning a good (though not large) income and I am very aware of my responsibility to wider society to which I contribute via 40% top rate tax and what appears to be a Band Z Council Tax bill. I am more than happy to do this in the name of fairness. The question however is when does a "fair" contribution become "being played for a fool"...3 times average contribution...7 times...20 times? How much extra contribution should one person have to make to cover the shortfall from the less well off or non-payers?

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  • 155. At 09:07am on 12 Sep 2008, william1957 wrote:

    Brian,

    Some of this morning's papers carried an interesting piece on Annabel Goldie's contribution to this debate. Apparently the Scottish Tories would use money earmarked to make up the shortfall in LIT to give Council Tax payers a rebate.

    Hmmm, let me think. What's better? LIT that narrows the tax base, and does not raise all the revenue required by local government and requires subsidy, or the present set up with a wider tax base, where contributions could be cut with money the present Executive may earmark to make up the shortfall in LIT.

    As our American cousins say it is a "no brainer" - go figure.

    Best Wishes,

    William1957.

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  • 156. At 06:31am on 28 Dec 2008, dennisjunior1 wrote:

    Brian:

    Surviving summer>>
    I think that enjoy your enjoy that time; and, get the rest they need....

    ~Dennis Junior~

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