Entertaining tax changes
Entertaining stuff, eh?
I refer to the sundry shifts in the Scottish Government's position with regard to Local Income Tax. Said shifts follow fairly blunt animadversions against the plan from rival parties.
In itself, there is nothing wrong with amending proposals. Indeed, it is the very purpose of consultation. If governments got everything right on every occasion, there would be no need for consultation. And, further, no need for law-making Parliaments.
However, the scope of the potential changes merits further examination.
What would remain of the original SNP proposals?
More, would the changes enhance the propspect of this Bill passing Parliament when put to the vote?
On the first point, rather a lot - indeed, the core. Scotland would shift from a system of local taxation predicated upon property to one predicated upon income. You earn, you pay. The changes are substantive but not utterly transformational.
Change one, students might be exempted.
Change two, there would be an attempt to extend LIT to cover "unearned" income, such as money derived from shares (if such might be envisaged in the current turmoil.)
Change three, councils might be able to vary the rate at which they set LIT.
SNP Ministers had previously insisted that the rate be fixed at 3p in the pound. Now, they hint that might be the cap. Councils could set LIT below that - but not above. That would still involve a substantial transfer of funds from central government to hold the rate to a maximum of 3p.
Re. unearned income, Ministers originally thought, as did others, it would not be possible to include such dosh.
Now it's thought by some, including Jeremy Purvis of the LibDems, that it could be possible to feature this loot by adding new elements to the system of tax self-assessment.
Others, it should be said, dispute this, saying it remains impractical.
Basically, Ministers are giving ground to those animadversions. Why should students pay? Why should those whose income isn't derived from salary escape? Wouldn't it end all local authority liberty and responsibility if they don't set taxation?
Opponents, including Labour and the Tories, say the changes don't add up to a hill of beans by comparison with the downside of loading too much weight onto salaried income. They warn of the impact on business, particularly at a time of economic downturn. They're looking to reform the council tax instead.
Then there's question two. The SNP doesn't have a majority at Holyrood. Do these potential shifts - tracked by the BBC's Politics Show at the weekend - do enough to win over the LibDems and the Greens whose votes would be needed?
Right now, no.
I stress: right now. The LibDems are, formally, in favour of LIT - but like that first word, "local". They say that variation up to 3p isn't local discretion. Their MSPs, even more so their councillors, will need more.
Further, there are more than a few in the upper reaches of the party who wonder whether LIT is really so wonderful at all.
The Greens also remain to be convinved. They dislike LIT, preferring land value taxation whereby there would be incentives to derive the maximum sustainable use from a property. They do not accept that LIT is, de facto, "fairer" than other systems, arguing that, even with the proposed reforms, it may neglect other sources of wealth in favour of predominantly taxing income.
Intriguingly, the Greens are also prepared to contemplate options which might emerge from Iain Gray's promised review of such matters. Mr Gray has openly admitted that Labour's policy on this question at the last Holyrood election was an uncertain mess.
Instead of dealing with the government, could the Greens deal with the largest opposition party?
Both the LibDems and the Greens, I suspect, could be swayed. But they are not there yet.
PS: Saw David Tennant in Hamlet at the weekend. I know, I know, theatre reviews now: what next, recipes? Indulge me: theatre is a major passion for me, not far behind the team in tangerine. (To whom, all praise for Saturday's glorious goals in fitting tribute to Eddie Thompson.)
The production was superb, with Tennant exceptional. He coped brilliantly with the classic dilemma involved in playing the troubled Dane: do you portray him as temporarily insane or as dissembling, merely "mad north-north-west".
Tennant depicted him as emotionally disturbed and unsure, brilliantly exploiting his uncertain relations with his mother as well as the perturbation caused by his father's death.
In addition, there was whimsy, irony - and a return to the humour which is or ought to be present in the text (Polonius, the grave-digger, Osric, Hamlet himself.) Magnificent.
I'm 
© MMIX~RS~q~RS~~RS~z~RS~07~RS~)
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Consultation and consensus are the only ways a minority administration can get anything done, so this shouldn't come as a surprise.
I hadn't realised students would not be exempt under the proposed LIT policy, as they are currently exempt from council tax.
If you have the basic premise of an idea that hasn't been tried before isn't it better to listen to other input rather than blindly defend your initial position?
Acting on consultation rather than going through the motions of consultation for appearances sake is what we see here, I for one am glad that we can have leaders that are willing to admit that they aren't perfect, that of course their policies could be improved on, welcome cross party input and hopefully implement a carefully considered, well thought through system with broad support.
The idea of taxing "unearned" income, such as that derived from shares is personally a must. If the original idea of LIT was to make the system 'fairer', so that those under the current system who did not have much did not pay similar amounts of council tax to those that earned larger salaries, it seems non-sensical to only tax "earned" income (salaries) and not other forms of income.
Such an LIT system would still place a greater burden on persons that did not have other sources of income, as the current system does.
Hopefully they can and will include this "unearned" income in the new proposals.
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It seems like a sensible approach from Mr Swinney to me.
It may not be his favoured option but he seems to have weighed that some Lib Dem concessions will result in a policy which is a vast improvement on the status quo.
Aside from Council Tax, with LIT being the 'only show in town' (to borrow a phrase) then I don't think Labour or the Tories have a leg to stand on with regard to opposition unless they can come up with substantive problems with what LIT aims to achieve.
http://snptacticalvoting.blogspot.com/2008/10/local-income-tax-steps-it-up.html
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Was always against the SNP's LiT scheme as it meant the end of all fiscal autonomy for local councils.....at a time when the SNP are demanding fiscal autonomy for themselves.
Also, the idea of a broad-based tax system was that everyone was caught in the net, and therefore paid there share. By taking 'property' out of the net provides an opportunity of widespread avoidance (as opposed to evasion) as many people convert their incomes to being property-based, avoiding the LiT charge.
And then there's those who will claim to be living in England (or who genuinely will be), who will avoid paying their share.
As an alternative to increasing the number of bands in Council Tax, providing additional lower and higher bands, maybe the Green proposal of a Land Tax has some credence.
We may not have the high-density situation that exists south of the border, but people are still moving more to the cities than moving out. Maybe we should be looking at ways of maximising the use of urban land, building upwards instead of outwards into ever-expanding suburbs, swallowing up increasingly-precious countryside.
We could even link this scheme up to the SNP's new obsession of renewable energy and encourage micro-windturbines through tax-breaks.
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Brian,
I for one have no reservations about the theatre reports, although you could pick productions that the rest of us have some chance of seeing! It's good to read your opinion on other matters, certainly when I saw you host Louis de Bernieres at the Edinburgh Book Festival there was hints of a great cultural mind at work. If that sounds like shameless flattery, that's because it is - I want to hear more about these recipes!
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I've never been in favour of the original LIT proposals. I always thought the proposed system was just as unfair as the current system (it was just unfair to a different set of people). So I am glad that the Government are looking at changing it.
However, I'm getting the impression that any changes to make it fairer (ie by taxing unearned income, etc) will also make it unworkable or too expensive to administer and so we're back to where we started from.
I would favour a review of the current system (which at least ensures that all households are considered) with more account being taken of the occupiers individual circumstances (eg students, pensioners, etc). One advantange of that approach would be that there would be no doubt that the "council tax benefit" would continue to be paid.
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Brian,
This is democracy in action.
Maybe you weren't used to it before, since Labour and the Tories just forced everything they wanted through.
Students were, by default, exempt anyway, unless they earned a lot of money, and even then would only be taxed for any earnings over the threashold.
What about the BIG news Brian, about GBs Britishness day being shelved, or A.Darlings method of dealing with the economic crisis being brought down to earth with a bump.
I'm surprised you didn't use Ian Grays description for your title Brian, but maybe you didn't know what a "Huge U-turn" was either.
As #1 said, this is minority Goverment in action, and Labour would be well advised to watch and learn the process which they have probably never seen or thought about before.
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6. Careful, Hughedinburgh.
You are forgetting about the SNP proposing increased cancer care but then trying to blame Westminster that they may not have enough money.
If the SNP abandoned just several of their silly little taxpayer-funded/low-impact/high-publicity schemes such as abolishing bridge tolls, the 'national conversation' (which hardly anyone reads), Salmond's endless biz-class 'trade promotion' flights around Europe/US, free hospital parking in some hospitals, slightly cheaper prescriptions for some etc.etc......then maybe they would have enough money for their cancer care.
Although that would obviously remove another opportunity for them to complain about that nasty union thing.
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Brian
What we are now witnessing is the start of reality for the SNP. the original plan was to put it simply, rubbish.
What is on the table now does not deal with the serious central issue. LIT needs to be local, to allow local people the ability to raise taxes to pay for the services they want. Preferrably to allow them to decide what kind of taxation they want to apply.
It would make councillors think more about the decisions they made, it would restore the link between the council and the electorate.
An abandonment of property taxation might start another wave of second homes in the Highlands, furthering the depopulation and hastening the end of our rural communities.
However the latest fudge is simply a gesture. the transfer of funds required to keep the 3p limit is such that it cannot happen and local councils will remain short of money and have to cut services.
Hence any reduction will be impossible.
I would also like to see a little detail on the mechanisms for taxing other income. Seems very difficult to do and expensive.
I would also like to see how the SNP propose to ensure that the burden of taxation is kept local, and that more canny areas don't end up subidsing the profligate cities of the central belt.
Really this is a miniscule improvement on a extremely poor idea.
If this really had been democracy in action and taking heed of the consultation, then the idea would be dead and buried.
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#7 Reluctant-Expat
"that nasty union thing"
Who said that about you?
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#1 ScotInNotts
I fully agree that it only makes sense using all income, but don't really understand what the calculation problem is. Surely HMRC can calculate and collect under the existing systems they've been building under the past eleven years of Labour UK government, can't they?
Even if not, it would be simple to split and regionalise the HMRC database so that a separate version could be operated in Scotland for Scotland, with appropriate rates based on Post Coding. That will be an essential anyway before full fiscal autonomy or independence, so it should be no big deal to do it sooner rather than later.
#3 Reluctant-Expat
A fair point re cross-border commuters, but as the differences will initially only be on primary residence, it shouldn't represent an immediate collection problem. It does need some Anglo-Scottish negotiation, though, which is perhaps a good reason to convene the English committee the Tories want to use as a stop-gap replacement for devolution.
I haven't seen what proposals there are for local taxation on secondary residences. A separate system, nothing at all or a 2nd 3%? The latter would seem most logical, but if anyone knows the proposal I'd be interested in a URL. "Duff" Gordon & Capt. Darling, for example, pay no tax on their social housing in Downing Street but should surely pay the 3% on their 2nd homes in Scotland.
I assume you're a UK-domiciled but non-resident expat, like me, and our situation would be slightly different as currently we're only taxed in the UK on UK income. A "floor" tax for non-residents unwilling or unable to declare their "world" income might be the easiest approach.
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While not a fan of LIT (as those in shared households will get tanked) i see nothing worng with these suggestions to now include unearned and Student income.
After all - it remains basically unfair that someone living off share didvidends (such as there are at present!) should pay nothing while those who have to earn their crust are taxed.
As to Students, the govt assure us that those the low paid will benefit. Anybody know folk in full time education who earn 10K or above? I think not.
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My concern about LIT is the resources that would be required to process it.
Speaking from a professional point of view, I know the operational requriements to process about one third of the requirement for a Scottish LIT.
HMRC cannot provide all of the information, so the assumption is that it would have to be collected from local level.
I don't know what the average population is per council in Scotland is, but here's an example:
East Kilbride (where I live) has a population of about 90,000. let's assume that South Lanarkshire has about 200,000 people.
That means forms would have to be sent to every household, possibly using the electoral register, or whatever means.
Assume 180,000 forms are returned. The type of information and processing required, using computer-based automated assessments, would require about 200 staff over a period of at least 3 months. That is assuming 15,000 are processed per week.
The other question is when will forms be sent out?
Then you have changes of income which require a reassessment to be carried out.
Evidence will also be required, either from HMRC or the individual concerned. More processing required.
These are not pie in the sky figures, they are based on operational requirements for work I am currently involved in using similar processes.
You would need forms since you will never get all the information from HMRC. Neither will you get it from the electoral register.
LIT is a good idea in principle, but practically it is a logistical nightmare. I don't want to shoot down the idea but having worked in a similar operation I have seen first hand the problems that arise.
The processes need considered first, before the exemptions.
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More Labour propaganda being spouted by BBC Scotland.
The Greens are committed to REPLACING the Council Tax and NOT amending it.
Brian Taylor conviently forgets that the SNP and the Scottish Greens have a 'signed' working agreement to REPLACE the Council Tax.
As I said, this is just more Labour propaganda being spouted by BBC Scotland.
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#3 RE:
I agree that individual councils should be able to set their own limits as each has its own particular needs and problems.
Would you still have a centrally imposed 'cap' on the upper limit, or would you like the councils to have complete autonomy in this matter?
I also agree with your sentiments regarding better land use, and as #5 points out, if in trying to make it fairer the LIT becomes too expensive or unworkable, I'd like to see a review of the current system with leanings towards the greens Land tax.
However, regarding the 'obsession' of the SNP with renewable energy technologies, I'd lile to see greater implementation of current technologies when there is construction of new infrastructure or maintainance of roads, in particular motorways.
Small wind turbines under tunnels and at the roadside, as well as cat's eyes which convert the kinetic energy when depressed into electricity to power the lighting all help.
It's not plane journies or even cars which contribute most to each individuals carbon footprint, its predominantly lighting and electrical goods. The only reason you hear so much in the media regarding the car and plane is because they can do something about it now with the least disruption to infrastructure, instead of replacing the hundreds of thousands of light bulbs with LED's.
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#6 HughEdinburgh
I fully agree, and also think that the further devolution of powers to Councils to allow locals variations, as the LibDems want and R-E's #3 seems to, are essentials in a fiar system.
If I understand it correctly, the 3% uses up the current maximum powers of Holyrood. but that would seem to be a matter for Holyrood as a whole to take up with the UK government, even in advance of Calman.
#8 northhighlander
"LIT needs to be local, to allow local people the ability to raise taxes to pay for the services they want."
Agreed, but in what way could LIT be considered less fair than property tax, provided it's levied on all income?
"However the latest fudge is simply a gesture. the transfer of funds required to keep the 3p limit is such that it cannot happen and local councils will remain short of money and have to cut services."
Also agreed, but isn't it the maximum Holyrood is currently allowed to apply? If so, perhaps the shortfall could be made up by an old-style rate on "high-value" properties based on open-market rental values.
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#10 Brownedov
Section 5 of the Government Consultation on LIT has the proposal - "We believe that the collection of tax on second homes and long term empty properties should be made through the existing system used for the collection of Non-Domestic rates."
The rate, however, may not be the same in all areas - "There is a range of options to base a second homes tax on but because second homes affect various areas differently, a one-size fits all approach across the whole of Scotland may not be appropriate. We are interested in creating a tax that would allow local authorities to play a role in determining how much tax owners of these properties in their areas pay, based on their superior knowledge of local circumstances. Local authorities for whom such properties have reduced the supply of affordable housing may wish to set a higher level of tax, which could be used to invest in local housing. Local authorities that wish to encourage second home ownership in their boundaries may wish to set a lower level of tax."
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#12 Neil_Small147
"HMRC cannot provide all of the information, so the assumption is that it would have to be collected from local level."
Could you elaborate, as I really don't understand which pieces of data the Inland Revenue are not already collecting except in the case of UK-domiciled but non-resident expats like me (see my #10).
And surely their new systems are flexible enough to collect it already, aren't they?
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Anything that takes cash raising powers out of the hands of councils can only be a good thing. The majority of them seem to have no concern for the taxpayer, their only concern seeming to be increasing their power base and the number of their employees. Councillors seem to be incapable of making any decisions other than confirming the decisions already made by their chief executives or director of finance. It seems also that when there are redundencies in local government ,it is lower grade employees from essential services that go, never the bloated overpaid higher grades, they are offered voluntary terms with a golden handshake. Whether LIT is the way to go I don't know, but it is infinitely preferable to the open ended community tax that exists now.
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#7 Reluctant Expat,
How about there would be more money if we didn't pay billions for illegal wars, nuclear weapons and the very expensive Edinburgh Trams (which nobody wants) or PFI which will cost the tax payer well over the odds in the long term for essential services?
I guess you are going to suggest that Labour and the Tory's don't waste billions of pounds?
In any event, how about you actually live in Scotland before criticising the SNP? In my opinion you have no mandate to comment.
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council tax was introduced by the tories so that the rich paid less, and new labour have not altered it in the 11 years they have been in power as they are now a right wing party and do not care about the poorer members of society any more, except when they want their vote.
the old labour party would not have left the council tax as it is at present state, as its only because the SNP have come up with a socialist policy that new labour in scotland are now saying that they will reform the council tax, no proposals yet, only talk.
i do not understand the lib-dem stance with regards LIT, they are in favour of it if it is collected localy, which would probably wipe out the savings that would accrue if it is collected nationaly across scotland due to the increased burdon on employers.
the tories and new labours opposition to LIT can plain and simply be put down self interest as they themselfs would have to pay more due to their own higher wages.
new labour point to the bodies that are opposed to LIT, and if we look at them as well, we will see that they represent the higher earners in scotland, who would probably pay more under LIT.
as for students, as far as i know they would not have to pay anything if their earnings were under 6,000 pounds, and if they are earning over that, i can see no reason why they cannot contribute, as LIT would only be on their earnings over that amount.
another point with regards the lib-dems, when the scottish parliament was in its early stages, did they not vote for the water boards in scotland to be amalgamated and for the bills to be standardised across scotland, so that those in rural communities where the water bills were about 3 times higher that the city bills, all paid the same for in respect of each council tax band.
if my memory serves me right, the above was so, and i saw nothing wrong with the principal of spreading the cost of the water and sewerage across the board, and that piece of legislation doubled my water/sewerage bill.
as for new labour in scotland, now we cannot have a glasgow east resident who owns a house in south glasgow having to pay more under LIT, or can we.
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#11 DonaldPyper
I just thought through the implications of your point re those on under 10K. Wouldn't the fairest way - and the most shaming on the Supreme Leader - be to have a starting rate band with a 50% discount?
For the time being, the band could be the same as the old 10% UK IT band.
#16 oldnat
Thanks for the info, which is probably sensible for expats outwith the UK. For those resident in Scotland, 2x or 3x the 3% would be fairer, but there's certainly a question over how logically to treat residents of the other 3 "home" nations.
For simplicity, when collecting taxes for themselves and their communes, the Swiss cantons use a system similar to what you describe for 2nd homes of non-residents of Switzerland and their own special system for residents of other cantons.
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19. "how about you actually live in Scotland before criticising the SNP? In my opinion you have no mandate to comment."
Ah, our precious nationalists are just wonderful, aren't they.
Oh, "wonderful" is the wrong word.....what's the word I'm looking for?......oh yes, "idiots".
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#19 BoNG0_1
"In any event, how about you actually live in Scotlact and before criticising the SNP? In my opinion you have no mandate to comment."
Your point is arguably valid against all expats and "foreigners" if you extend it to all Scottish politics, but you should either complain about all or none, and the fact that I agree with your first 2 paras doesn't make me less worthy of your scorn than Reluctant Expat.
When or if it comes to referenda, there is most certainly an issue here, as I've said before. As UK-domiciled but non-resident, I am eligible to be on electoral rolls and would potentially be able to vote. That does not apply to anybody non-resident in Scotland but on a UK electoral roll.
It stirkes me as an anomaly which should be resolved in as fair a way as possible.
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Can someone explain to me how the LIT is better than the current system regarding the 'highlands and islands' and rural areas, where demographically there are less people to tax, but the public services are more expensive to run/maintain than those in urban areas due to transport costs etc.?
Is there a mechanism to distribute revenue obtained from the LIT or will these communities have to rely on extra central funding?
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14. I certainly wouldn't have any centrally-enforced cap on local taxation as that goes against my belief in community empowerment.
If a council decides to set taxes high, then it is that council's electorate that decides whether or not to accept it, NOT representatives from other cities sitting in another legislature.
As councils are in constant competition with each other over attracting industry, wealthy and educated residents etc., such outside interference is like giving company directors seats and votes on the boards of all their competitors.
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#20 U13282939
"i do not understand the lib-dem stance with regards LIT, they are in favour of it if it is collected localy, which would probably wipe out the savings that would accrue if it is collected nationaly across scotland due to the increased burdon on employers."
Are you sure about that? I know that they want the rate to be varied locally, but that is no reason why HMRC couldn't calculate and collect it, at least for the time being.
Of course, if the HMRC system is so badly designed as not to be able to relate tax rates to post codes that would be another matter. It will probably also indicate the need to replace it anyway for the switchover to the Euro.
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As someone who stands to benefit hugely, in theory, from LIT, I still feel bound to say it looks like an ill-considered shambles, and the changes will make it a complicated ill-considered shambles. The present system, warts and all, has evolved over generations and survived all political interference. To a financial incompetent like me that would suggest there is some merit in it.
I can see areas of inherent unfairness, but surely it's wishful thinking to imagine anyone will come up with a system that's fair to all, in all circumstances, and still brings in the necessary funds?
I commend the SNP for trying. I understand the populism in robbing the rich to help the poor. But I still think it's a lie to tell people they will be better off overall.
I fully expect any savings in my tax bill to be offset, probably more than offset, by other charges necessary to meet the inevitable shortfall. People will not forgive the SNP when the true costs of living in Scotland become clear. I do appreciate that some will think it a price worth paying. I don't.
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Two things Brian?s and others comments prompt me to say-
Although Council Tax feels like a vast sum for those of us who pay it, it still makes up a surprisingly tiny percentage of council funds. So even though it makes us feel warm and fuzzy that a Local Authority actually is somehow accountable to us, Council tax isn?t (wasn?t) really a good way to judge your local authority.
Secondly, speaking as a recent graduate, if a student is working 21 hours a week and over the tax paying threshold, why shouldn?t they realistically pay tax? Why are you a student if you are working that many hours? I worked all through university, but you shouldn?t ever put work before your studies. Or if you are lucky to have a well paying job, why should you be exempt when you can afford to pay, no one else is.
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PS to my #21
I should have mentioned that to the best of my knowledge, all the Swiss cantons collect all Federal (common), Cantonal (variable rates) and Communal (variable rates) personal taxes using the same (common) computer system with different languages, cantonal crests and addresses, etc. for the outputs.
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#22 Reluctant-Expat
There you go too far. There are valid points to discuss in who should have what electoral rights as I point out in my #23, but to brand all nationalists as idiots is being idiotic yourself. Even I do my very best to distinguish between misguided NuLab supporters and their often idiotic leadership.
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#25 Reluctant-Expat
"I certainly wouldn't have any centrally-enforced cap on local taxation as that goes against my belief in community empowerment."
Glad to hear it, but I haven't heard Scottish Labour clamouring for an end to the 3% cap imposed on Holyrood. Are you suggesting that the UK government will lift it anytime soon?
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21. At 3:39pm on 27 Oct 2008, Brownedov.
i believe that the proposed way that they are going to deal with 2nd home owners is that there would still be a local council tax for properties in those cases.
the SNP are confined by the devolution settlement in that they can only add or subtract 3% from local income tax, no more or less, and at that it would not be sufficient to cover the requirements of the councils and the SNP are going to make it up from the scottish government budget.
it is proposed that it will be collected by HMRC and handed to the scottish government in a block, who would then allocate it to the councils as they do at this time with the other approx. 80% of local council funding.
LIT is certainly a large tax break for the poorer members off society, and i have worked out an approx. table on what you would pay with regards low incomes.
if you earn 6,000 per year you pay zero.
if you earn 7,000 per year you pay 30 pounds per year.
if you earn 9,000 per year you pay 90 pounds per year.
if you earn 11,000 per year you pay 150 pounds per year.
if you earn 15,000 per year you pay 270 pounds per year.
if you earn 20,000 per year you pay 420 pounds per year.
if you take the council tax bands as they are at this moment, then ordinary pensioners and low paid workers will be far better of under LIT.
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Fiscal autonomy would make it much easier to allocate taxation more appropriately between income, sales and property taxes.
The SNP tried to devise a policy that operated within the Scotland Act, but maybe we need to recognise that sensible restructuring of the tax burden can't happen until fiscal autonomy happens.
Until then, almost eanything is likely to be a bit of a mish-mash.
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Re 15 Brownedov
If the government achieve a tax law that means the ritch pay their whack it will be a world first.
The rich will find tax avoidance schemes because they can afford to. The game of cat and mouse over this will be the same as for income tax.
I don't see how this tax will be collected from the self employed etc at the same percentage as for salaried emplyees.
It strikes me with all the add ons this is going to be one mighty complicated collection arrangement. And Costly.
Re kaybraes
I find it difficult to reconcile the SNP need for tax raising powers for Scotland as an exercise in improved democracy, and due to a burning desire for self determination, but local councils are not allowed such rights. personally I don't see how holyrood can claim to be any better than the councils when it comes to bloated fat cats. Not much effort from the SNP to tackle any of the fat cats so far. Indeed LIT is likely to create more.
Re 16 old nat
I note the section on second homes, but don't see much discussion about it. However if the SNP calulations are right and 90% of us are better off under LIT then if this is levied at the same rate it will reduce the cost of second homes. There is nothing in the consultation that says this will be allowed to be used as a disincentive towards second homes, ie levied at a rate above the 3%. Past history has shown that coucil tax was levied at reduced not increased rates on second homes. I know this is not a vote catcher but it is a serious issue in a lot of vulnerable communities.
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#32 U13282939
Thanks very much for the info. I see it as very encouraging that a strong supporter of the current UK government like Reluctant-Expat sees the cap as inappropriate in his #25, but will be happier still when his Politburo are prepared to do something about it.
I the meantime, LIT is clearly best used to replace the unfair council tax, but I think it would be worth considering a 50% reduction for the old 10% band.
Whether it can be varied down further locally will presumably depend in part on the adequacy of the HMRC system.
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#34 northhighlander
I think you may have misread the section on taxing second homes.
They won't be taxed on income (subject to a 3% max) but as a local tax levied in the same way as non-Domestic rates.
It would be up to the council to set this tax at any level it wished - in some areas with a high proportion of second homes which damages the prospects of locals getting houses, it would no doubt be set at a punitive level. Other areas may find that it serves their purposes to have a higher proportion of second homes, if there is a surplus of houses and locals are not disadvantaged by their being occupied and bringing some additional expenditure to the area.
This is what you want - local determination for local problems.
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#33 oldnat
Spot on, but presumably everyone except the SNP is awaiting Calman's recommendations before accepting the blindingly obvious.
#34 northhighlander
I take the point, but the only places I know where there is no tax avoidance are in the Persian Gulf where there is no personal income tax, and even there, as in pre-EU Livia, smuggling is the national pastime.
I do think you over-rate slightly the possibilities of tax-avoidance for the self-employed. It's the "expenses" of Directors (& MPs) and bonses based on share options where the greatest scope for "creative accounting" lies.
I don't see that collection should cost anything to speak of as it is merely a few numbers to keep track of within an existing computer system.
I certainly agree that there shouldn't be a "discount" for 2nd homes.
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37. At 5:14pm on 27 Oct 2008, Brownedov.
as far as i know at the moment 2nd home owners pay 90% council tax on their 2nd home, a while back it was 50% ( tory set rate ) but new labour increased it.
got to go now and do a sarosky ( stamp collecting ).
hope i spelt his name right as i've not got time to check.
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Shock horror: government listens to people, modifies policy.
Don't suppose you want to comment on the two farce 'visits' by the Broons to Glenrothes? Thought not.
Don't mention the war.
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#25 Reluctant-Expat
Looks like you're straying from the party line. Capt. Darling has been on the stump in Glenrothes today and the Scotsman's Darling stresses UK role in weathering downturn they quote him thus: But Mr Darling said the idea of having 32 different rates made "a bad idea even worse".
I do hope you can get your chums to see sense on this.
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Brian,
I must admit that you had me craniallydiscombobulated:
"animadversions" ?
Never heard of the word before, is it a real one?
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#39 pattymkirkwood
LOL but you must admit it's a completely new experience for most of us.
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Oh, and should have said, why do students get off with the tax? If they earn sufficient to be taxed, then tax them!
The reality is though, that very, very few earn enough to be taxed whilst students.
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All persons with earned incomes should pay. I don't understand how some posters see this as a problem or think that they shouldn't.
Can they explain,please?
The problems about unearned income avoiding LI taxation is exactly the case with our present National Income Tax collection. I don't recall any furore about that in regards to our national Income Tax.
Can I expect that some of these people who established this was a problem with LIT will start a similar campaign about National Income Tax.
Thought not.
It's only SNP policies they oppose.
A very clever suggestion coming to the fore is that individual councils may forego some of the 3P in the pound national hit on the agreement they will take an appropriate smaller sum from the Government .
Thought not
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22
Reluctant Expat's final sentence establishes firmly who the "idiot" is.
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Brian, I could LOVE the idea of a local income tax. Here's why. Like hundreds of thousands of my fellow scots, I am paid by a multinational company, with a UK head office in England. Hence I have an English tax code.
Now, let's say for the sake of argument that I tell the tax authorities a little white lie that I'm now living at my Sister's address in the darkest home counties, and KERCHING - no council tax and no extra income tax, and I'm a couple of grand better off for one little white lie.
Maybe, being an honest type of guy, I wouldn't do that, but I bet thousands will, and the rest of us will be making up the difference.
Any doubters should cast their minds back to the number of people who "disappeared" when we were gifted with the beloved poll tax.
Expect more of the same ....
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27
"The present system, warts and all, has evolved over generations and survived all political interference. "
Eh?
The presnt CouncilTax system is a shambles and a ham fisted political effort to undo the previous shambles of the Poll Tax. Neither of then had or has had a "generation".
Neither of those have any relationship to income or abilty to pay.
Both of them are expensive nightmares to collect
Both of them are easy to evade.
The LIT proposals which will be centrally collected in a system which already does this is simplicity itself and will relate directly to a person's ability to pay - icluding all those whoare presently evading paying their share for local services they all use because they live in households with more than one earner.
The principle of LIT is accepted. All we are discussing is the mechanics of application
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41 irnbru_addict
Yes it is, but "craniallydiscombobulated" is two, and I think the second one was an invention of Blackadder.
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Is it just me, or has Capt. Darling (thanks Brownedov ;-) not realised that Scotland, under LIT, shall have a lower cost of living, driven by the fact that the incomers shall not pay Council Tax?
The spin of "increased income tax" omits my previous paragraph!
Condescending entrenchment from the man who shall be long out of office when the true cost of all the borrowing he has in store for the UK becomes clear!
Also, am I missing something on how LIT shall be collected; Income(from employers or self-assessment) / Post Code =LIT payable?
Seems simple enough, with the information HMRC already hold on all taxpayers, whatever the source of earnings.
Only the non-domiciled (whose families reside here) shall escape and the Council-Tax arrears officers can be re-deployed to pursue them.
Please remember folks, councils already employ many staff to collect and process the Council Tax!
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#43 irnbru_addict
I agree with you about students. It makes sense for non-earners not to pay poll or council taxes, but income tax?
My daughter was at St Andrew's Uni at the same time as the likes of the son of Teddy Taylor (ex-Tory MP for those of you too young to remember), who didn't seem to be short of a bob or two.
Almost no student would pay LIT - the few who would won't be earning their cash stacking shelves in the Co-op!
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Re 36 old nat
Apologies you are as usual right, I should try and do one thing at a time. On a more detailed reading there is indeed merit in this part of the proposal and I would go as far as to say I actually strongly agree with this policy as it does restore local democracy. So for this part a definite welcome. I know this is not a significant isue for most of Scotland but it is an issue in the Highlands.
However it does mean we are keeping a part of the property based tax. I also think the exceptions, ie the effort to make other incomes subject to the tax make it a bit unwieldy.
I also think your point re the Scotland act is well made, the 3p limit is just not workable.
I also think if the revised bill is to have a shred of credibility it has to make abundantly clear where the shortfall in local government income is to be made up from.
It is becoming apparent in the NHS that many government announcements, such as the scrapping of parking charges for a limited number of hospitals is to be paid from cuts elsewhere in the NHS. It is a cheap stunt that promotes greater inequality.
this type of shabby politics is pretty much straight from the Blair / Campbell school of spin.
I reckon the SNP know that LIT is destined for failure, and alec is just looking for a bigger fight with Westminster.
I think the voters are becoming tired of this gesture politics and it is a tatic that can be used too often
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#42 - Brownedov - fair point.
Still, for me this is largely a strategically placed 'non-story'; especially when other huge matters are going on in the background.
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#46- akginty
I am also employed by a multi-national company- there is no such thing as an "English" tax-code. Tax-codes detail an individual's personal allowance and their status for tax to be deducted (K, or L etc).
Your comment relates to an employer's tax reference.
As for the "disappeared" during the poll-tax, if their earnings were NOT subject to LIT, then there's the starting-point for the investigators- problem solved!
Oh, and before you start burning all the flags (earlier post):
""The term ?nationalism? is generally used to describe two phenomena: (1) the attitude that the members of a nation have when they care about their national identity and (2) the actions that the members of a nation take when seeking to achieve (or sustain) self-determination. (1) raises questions about the concept of nation (or national identity), which is often defined in terms of common origin, ethnicity, or cultural ties, and while an individual?s membership in a nation is often regarded as involuntary, it is sometimes regarded as voluntary. (2) raises questions about whether self-determination must be understood as involving having full statehood with complete authority over domestic and international affairs, or whether something less is required.""
Idiots on all sides forget these two common definitions of Nationalism; nothing to do with chauvinism, or the wish to subjugate others! Merely a wish to self-determine. Can anyone see a problem with that?
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#52 pattymkirkwood
How do I get one of those gold-cards?!? The mods have a soft-spot for you!
;-]
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#52 pattymkirkwood
I don't disagree with a word of that. I also think that while the by-election is on, things that the UK parliament can directly impact should be a little more to the fore.
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#28 Nezavisimost
"Secondly, speaking as a recent graduate, if a student is working 21 hours a week and over the tax paying threshold, why shouldn?t they realistically pay tax? Why are you a student if you are working that many hours? I worked all through university, but you shouldn?t ever put work before your studies. Or if you are lucky to have a well paying job, why should you be exempt when you can afford to pay, no one else is."
I too worked during my studies, to have a llittle spending money and to keep down my overdraft. Normally I'd agree with you that if you're working 21 hours and earn enough then you should pay LIT, however there are a few groups (mature students, single parents, students from low income families) that I feel should be exempt. If this is not the case then we'll be back to the bad old days of University only for those that can afford it, not for those that have the ability and can't.
#44 Sneckedagain
"All persons with earned incomes should pay. I don't understand how some posters see this as a problem or think that they shouldn't.
Can they explain,please?"
Same answer.
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If LIT is to be capped across Scotland, then why is it called "Local"? Why not just centralise the whole process and then allocate funds out across the councils.
It would reduce costs for starters and you would have a central point of control.
But I'm still trying to figure out that when councils moan about lack of funds, LIT is going to solve this since it appears almost everyone will be paying less.
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#46 akginty
Thanks in part to the surveillance society NuLab has introduced, I think dodging LIT would be rather harder than merely disappearing from the electoral roll. TV licences, NHS registrations, driving licences, vehicle insurances & registrations, etc. would all make it much harder to be invisible than it was in the '80s.
Yes, it may happen on a small scale, but see oldnat's #36 and you'll realise that anyone with an actual home to hide will be paying anyway on that scheme, particularly if it has a telephone, broadband, water, gas or electric connected to be traced by.
And further, as gt-cri's #49 points out, the existing collection officials will have less on their plate.
In fact, a few job losses in the councils themselves is the only downside I can think of offhand.
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Anyone see channel 4 news and the story on Brown's 'responsible' borrowing?
"economists" from Capital Economics estimate that government borrowing, which has risen to £36bn 2007-2008, could rise to £43bn for 2008-2009. The same economists also predict that the 2008-2009 borrowing could actually be as high as £60bn, £80bn for 2009-2010, and £110bn for 2010-2011.
Would be interesting to know how they arrived at these figures, given how much confidence economists inspire these days.
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#51 northhighlander
Neither the SNP nor the Lib-Dems advocated removing all property taxes! Both wanted to replace the Con/Lab Council Tax. It was a legitimate objection that unearned income would not be taxed, and taxing that does not make it "unwieldy". That's already been made clear - the grant from the Government to LAs will be increased. Hence Central Government will spend less and Authorities will decide on the spend of a larger proportion of public expenditure - essentially what the Concordat was all about.Sometimes you exasperate me!
I agree with a lot of what you say, I believe you when you say that you are not aligned to a political party - but ....
"NHS/shabby politics/cheap stunt/picking fights with Westminster."
Come on that's straight anti-party political posturing. I thought better of you than that!
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#49 gt-cri
You're welcome, and I particularly liked your "condescending entrenchment" - how true.
#50 oldnat
Spot on, as anyone whose children have been in Uni since '97 will attest.
#54 gt-cri
You're reading too many of my posts!
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#56 ScotInNotts
"there are a few groups (mature students, single parents, students from low income families) that I feel should be exempt"
They shouldn't be exempt from LIT liability, but some may need increased allowances.
For example, J K Rowling is a single parent. So was Prince Charles.
The focus of tax payment needs to be on individual circumstances, not falling into an artificial category.
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#56 ScotInNotts
If you're saying that society should subsidise needy people who are capable of benefiting from a univeristy education, then I agree 100%. What I don't see is that the populus of a university town - particularly a small one - should disproportionately bear that subsidy. If it's desirable, it should be supported and paid for at national level.
In any event, the numbers actually paying will be pretty small and will be the ones who are significantly better off than their peers.
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#54 - I don't know! The thread before last all my contributions were reported for some reason and then this happened!
#55 - Brownedov - agreed, a determined focus on Holyrood at this time is little more than muddying the waters.
But then again, the Labour candidate is running on a platform based on a series of measures which fall under Holyrood's jurisdiction!
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northhighlander
You exasperated me so much that I found myself arguing on behalf of LIT - which I don't even believe in!
Under fiscal autonomy, there is no reason why we can't have a sensible allocation of expenditure and consequent taxation.
Parliament needs to raise the revenue to pay for "common services" (whether provided by the UK or EU).
Parliament needs to raise the revenue to pay for services that they provide directly (or use LAs or other agencies to provide on their behalf).
Local Authorities need to raise the revenue to pay for the services that their people want to be provided.
Income, Sales/Purchase, Property taxes then need to be appropriately raised/distributed.
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#64 pattymkirkwood
What a coincidence - surely auntie couldn't be in cahoots with Roy, could she?
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#66 - I remember a nice slot Roy was given on news 24 - with no opportunity for refutation. But that must have been an administrative error - or something ... I don't want to get blocked out again!
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#65 oldnat
Are you showing creeping signs of centralism? Your post implies that you would wish council spending to be set nationally rather than locally, which seems (I hesitate to write it) Labour-like as opposed to liberal.
I agree that central government may feel it appropriate to delegate and pay for certain services, and they will certainly need to subsidise some remote and sparsely populated areas, but in the main local services should be just that - local and determined by the local community.
Now that there is real democracy available for council elections via STV, surely it's up to each to determine and raise their needs. Obviously for commercial premises some kind of rate must be levied but in the main LIT seems the fairest option for the majority of residents, perhaps with a nationally agreed cap.
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This story can be made as complicated or as simple as you want it, but at the end of the day it is a done deal.
LIT is here, simple.
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#68 Brownedov
Centralism doesn't creep, it stamps!
No, I simply meant that once rid of UK decisions, we can determine a more sensible fiscal policy. Which taxes (or proportion of them) should be raised locally/nationally should be determined after a practical examination of the cost/benefit analysis rather than tinkering around with a regime primarily determined in London.
Northhighlander (who seems basically a good guy) exasperated me so much that I also forgot to mention excise duties and business taxes as part of the mix that should be rationally rather than determined by the Lab/Con alliance on behalf of the very wealthy!
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#62
Apologies for any confusion, I did not mean that all people that came under any "artificial" category should automatically be exempt. Of course it is based on the individuals income and circumstances, much like the SAAS system used to work out current levels of support, in which case there would be those completely exempt.
#63
I can see the point of University towns having to bear the burden of subsidising students using services and therefore they should receive central funding. However these towns have been taking o this burden to date under the current system.
As I said earlier in #24, how does LIT benefit less populated areas without this need for extra central funding, granted that the Scottish parliament has its hands tied with the 3% cap for income tax. Fiscal Autonomy!
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Brownedov
The Front Page of the Independent (on Politics Home) seems to have a new poll, but the story's not showing on their website.
Just a "heads-up" for you.
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57. At 8:02pm on 27 Oct 2008, Neil_Small147 wrote:
If LIT is to be capped across Scotland, then why is it called "Local"? Why not just centralise the whole process and then allocate funds out across the councils.
It would reduce costs for starters and you would have a central point of control.
But I'm still trying to figure out that when councils moan about lack of funds, LIT is going to solve this since it appears almost everyone will be paying less.
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the reason that it is called local income tax, is that as part of the devolution settlement that the scottish government can raise or lower income tax by 3p, as its only in scotland, it is thereby local to scotland.
i believe that it would lower collection costs for the local councils, but as has been pointed out that could result in some job losses for council workers, hence there are savings to be made by local councils, which can then be diverted into lower class sizes ect..
councils across the whole country moan about about lack of funds as sometimes they have to wait until money is availiable for their pet projects, like brand new council offices.
the people that will be paying more are the rich, and families with multipe wage earners in the one household, if their total income is over ( i believe ) 65k per year.
i believe the reason that new labour and tories are so opposed to the introduction of LIT, is that when voters in england see the benifit of LIT, they will be under pressure to introduce it country wide,
plus of course new labour are using it to distract voters in glenrothes away from their dismal handling of the UK ecconomy.
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I missed it over the weekend, but STV's coverage of "Duff" Gordon's visit on their PM makes first appearance in by-election campaign strikes me as a model of what this site's should have been.
After a short clip of the PM telling STV what he was planning to tell the electorate, there were good clips from Salmond & Aunty Annabel followed by a bizarre mime from Kennedy while Wills played the bagpipes - perhaps trying to ensure they don't "steal" it.
I particularly liked Aunty Annabel's closing: "These are the issues people want to talk to politicians about and these are the issues that politicians have got to be brave enough and bold enough to actually be prepared to listen to the voters when they're talking about these worries."
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#48. oldnat, said that "discombobulated" was a word invented by Blackadder.
...and here was me thnking that she just did nice paintings of cats, orchids and japanese gardens...
;o)
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#70 oldnat
OK - understood.
Of course there other taxes - VAT is an EU requirement even Switzerland has implemented - and of course there has to be a mix, but I see a locally-set LIT as being inherently fairer than any other method of paying for local services.
You had me worried for a while that R-E and I were united agin you.
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#75 irnbru_addict
LOL
And there are some fine examples of her work in Harlow Civic Centre, of all places.
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68. At 9:39pm on 27 Oct 2008, Brownedov wrote:
I agree that central government may feel it appropriate to delegate and pay for certain services, and they will certainly need to subsidise some remote and sparsely populated areas, but in the main local services should be just that - local and determined by the local community.
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i can partly see your point in the above, and could it be that you introduce LIT, which has to be subsidised by the scottish government to meet the all the councils budgets at this time, and also allow local councils to raise more via a council tax, if the local residents agree to it via a local referendum.
in the main local services are determined by the local council and how they spend their allocation is up to them, and they will be accountable to the local electorate on how well they use it.
the scottish government allready give extra to the councils with sparsely populated area's via their 80% allocation, and the only difference would be that the allocation will go up to 100%.
the problem that arose with aberdeen council was that the previous new labour/lib dem coalition addministration, overspent on their budget by 56 million pounds and did not balance their books, which is against the rules, and to the SNPs credit they are trying to sort out the budget without creating a big fuss and blaming new labour.
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#72 oldnat
Thanks - it's still not on the Indy website, but it's already available in PDF from ComRes.
I may have a look first thing but I have to work later in the morning, so I'll have an early night.
It won't be shatteringly significant for Glenrothes - the Scottish sample is only 89 weighted, but worth a look anyway.
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#78 U13282939
Understood. I'm not trying to mount a campaign for it now but feel that's the logical way to move things forward following fiscal autonomy. Until then, local variation would be at best symbolic.
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#79 Brownedov
Yes, usual tiny sample. It might mean an increasing polarisation between Labour and SNP, or it might mean nothing at all!
If we ever get to a situation where Scottish polling is done on a regular basis, I hope it reflects the different patterns of voting in different Scottish regions, rather than the Westminster-centric model that YouGov adopts.
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just read the article on scotland including aviation and shiping in ther green targets and it crossed my mind that ? could it be possible for aircraft to use hydrogen gas as opposed to aviation fuel. does anyone know.
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Hi guys .... is anybody else getting fed up with hearing ' Labour is the only party that can steer us through these financial difficulties ' or whatever ..... they're not kidding anyone .
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#82 .... since im working in an aircraft hangar ill go and ask lol
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#82 No .... its closer to diesel rather than petrol so hydrogen gas could not be used. The engines would have to be totally redesigned and then you have the flammable problem ... A1 (aviation fuel) is not as dangerous as hydrogen gas ... incidently you can use A1 in a diesel car altho it has no lubricating properties so your car would break if you didnt mix it with proper car diesel. Maybe thats one for the future but at the moment hydrogen is not cost effective . The Americans are already trying to be non dependent on oil and are testing some of their heavy bombers on bio diesel .
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#81 oldnat
The Scottish sample in the ComRes poll is tiny compared to the YouGov poll and - perhaps crucuially - the data is 2 days newer, polling having finished on Sunday.
It may well not be significant, but it will certainly make cheery reading at SNP HQ.
Here are the %s of those planning to vote in the two polls:
Getting late, but I'll look at it again tomorrow.
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#82 One more thing i suppose if you can use bio diesel it would be possible for aircraft to fly on chip fat lol ... altho people who live near airports would be hungry all the time with the smell of chips wafting in the air ;o)
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Most of the so called problems about LIT are synthetic inventionsand headline what will be small problems at the edges which will impact on a very few people. These are being promoted as if they are major flaws in the main principle of the proposal.
All taxation systems throw up a small number of special cases which will require special provision.
The LIT proposals remain in principle highly popular and the SNP will win the next Scottish election on them. This probably explains the frantic and unrelenting attack on them but just because unionist media commentators keep trying to convince us that the proposals are in trouble doesn't make that is the case.
The "concern" about LIT being set and collected nationally and therefore not being "local" is typical of the sort of nitpicking nonsense we keep getting. The fact that local councils will be entirely responsible for spending it makes it very local and they will be accountable to the electorate on how wisely they do this.
The absurd proposal that all councils should set their own rates to raise the money they need would mean that farflung and remote areas would either have stupendous levels of local taxation or very few services -
(which is in fact one of the major flaws in the present Council Tax system which is putting increasing pressure on the level of social provision in our rural areas year by year).
The man in the street doesn't give monkey's about whether his taxation is set and collected locally or nationally - only the level of it and how wisely it is spent.
There is no electoral benefit to be had on this aspect of the proposals so I rather wish the LIBDEMs would stop playing silly b*ggers on it.
Students paying it is another red herring. Most students earn well below the level of personal allowance and woudn't pay anything. Those who are earning enough to pay Income Tax can well afford to pay LIT.
Roll on the next election.
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#83 rabbiehippo
Yes, but it's not easy to find any media that are not hardline unionist. Do have a look at the STV link in my #74 - to me it was a pretty refreshing change. Almost - dare I say it - balanced.
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#82
wasn't it called zepplin or hindenberg or somin?
Seriously though there are a few articles showing that the yanks have tried it, both a long time ago, as well as recently with fuel cells.
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Have Labour gone totally insane?
At a time when we are going to lose jobs in the financial sector, Darling says "If you want people to come here to work in the banking industry, if you want to encourage people to work here at the moment, to put up their income tax over and above that which everybody else is paying in the United Kingdom" - as if such people (who?) couldn't work out that they would not be paying Council Tax.
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87. At 00:12am on 28 Oct 2008, rabbiehippo.
stop it, your making me hungry just thinking of chips.
thanks for the info on aviation fuel/hydro gas.
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#90 'fuel cells' erm maybe on a plane with electric motor driven propellers ....but not on jets, also these are just surveilance not people carrying. As for the zeppelin well companys are looking into making huge airships to carry freight cheaply around the world. Only thing is hydrogen is out helium is in ..
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#91 'If you want people to come here to work in the banking industry' ... id have thought that if the merger goes ahead ... there will be plenty of local bankers looking for jobs in the banking industry let alone outsiders. I agree Labour have lost it ... noticed on Lindsay Roys rossette 'Vote Scottish Labour' not just Labour !!
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#92 The engineers have told me that chip fat is too heavy to power jets being that aviation fuel is of a specific gravity suitable for engines.
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#93
Regarding zepplin, of course I was only joking but didn't realise people were looking at them for freight transport?!
As you say fuel cells for any form of passenger transport are a ways off yet, and as you said would require a redesign of engines and the like. More likely to be implemented in cars before aircraft I would've thought.
Apparently NASA modified a B57 bomber (jet powered) in 1956 to use liquid hydrogen, no mention of whether it ever flew though!
Never mind the hydrogen, where's my ion drive or my space elevator?
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96 Aye they probably had it flying on liquid hydrogen ... but its just to dangerous to handle .... last i saw that to put it in cars would need a robotic arm to do all the filling as humans are too careless.
Ion drive car ??? the way its going we will be back to horse and carts before long.
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The idea of LIT is sound but I fear SNP heading into uncharted territory, moving onus for payment from a house to individuals will require significant change and cost within local government, collections charges will rise as many will refuse to pay, I remember the poll tax riots in the 1980's would that happen again?
Far better for SNP to focus on the basics in these tough economic times and not try to introduce something that will probably cost far too much, cause unrest and potentially dump them out of power at the next election.
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Students will need to be exempted, the last thing we need the Scottish Government doing is making the Scottish Higher Education sector less attractive to students, both from within Scotland and from elsewhere (both within the UK and overseas).
The Scottish Higher Education sector contributes enormously to the Scottish economy, especially at institutions with a large research roll, such as Dundee, Edinburgh, Aberdeen and St Andrews. If these universities, some of the best in Britain and the world can't attract the best and brightest students (especially if they're from a deprived background and don't have a Mother and Father who can pay any local income tax) then the entire Scottish economy is at risk, given how reliant the economy is (and is becoming) on skilled professionals.
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How can you refuse to pay if it comes out of your wages/income just like tax and NI ?
'Far better for SNP to focus on the basics in these tough economic times and not try to introduce something that will probably cost far too much, cause unrest and potentially dump them out of power at the next election.' ...thats the official Labour party shpiel that is. Ive worked out by the post further up that i will be better of with LIT and since it will help out old people etc i'm fine with that . Also why should a family of 4 with 4 earners in the house pay hardly anything. A lot of these kids that live with their parents usually dont pay much rent or whatever to live there, but they still use the public amenitys.
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On the subject of hydrogen. The biggest problem for using it as an aircraft fuel is that is needs to be stored as a liquid, which means VERY low temperatures.
Perhaps they should just stick a politician at teh back of an aircraft facing rearwards, it would get you anywhere fast.
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Neil ... politicians are more suited to balloon flight what with all the hot air. ;o)}
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#98 Vinanglais &
#100 rabbiehippo
Rabbie is absolutely right about collection. Perhaps it's Brown & Darling who are afraid that their expensive HMRC systems aren't flexible enough to cope. For councils, collection costs and charges will virtually disappear. How can you refuse to pay if it's taken through PAYE or self-assessment?
The poll tax unrest was due to MANY poorer people resenting being penalised to the benefit of FEW richer ones. Are you suggesting that the rich will take to the streets to protest at their losses due to a fairer system? Do you really think they'll have much public support?
Even if they did riot, the sympathy of the average police constable (who will benefit) will hardly be on the side of the "Ritz rioters", contrary to the poll tax situation where they were made to defend the indefensible.
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#99 Jolly Old Saint Nick
"Students will need to be exempted"
Are you in write only mode, or have you read any of the posts above? How many students do you believe earn enough to pay the tax? The answer is surely a very few who can actually afford it.
I agree that there is a small issue with non-dom foreign students where existing arrangements for non-residential property will probably need to continue.
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i honestly believe that the opposition to LIT by the new labour and conservative parties is that in the other parts of the UK the population at large would be wanting it introduced as well.
it would give the liberal dems in england a massive boost if they joined the SNP on the introduction of it in scotland and campained in england with LIT as part of their manifesto.
its up to the lib dems to drop the problematic local councils LIT ( 32 diff. rates in scotland ) and start at the one collection rate and possibly in the future once its established look to see if its economical to move it down a more local level.
i must addmit that the SNP putting out the consultation first, and then looking at the responses, and actualy trying to solve peoples concerns on who would get of from paying is something new from a government.
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re- students.
allthough i believe that if students earn more than 6,000 then they should start to contribute to LIT, it would be possible to give them an extra allowance before LIT kicks in, as if they stay in rented accomodation ( which can be expensive ), but certainly not if they stay at home with their parents.
i do not believe that a contribution of 30 pounds per 1,000 pounds of earnings over 6,000 pounds is a hardship for anyone, students or otherwise.
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#91 oldnat
"Have Labour gone totally insane?"
Perhaps not all of them, but Capt. Darling seems to have gone OTT, emulating his boss. The Herald link you point to is another typically scurrilous NuLab party political, but somehow I don't think it will win many over. Any right to reply would of course have mentioned that the LIT will effectively scrap 32 different regressive taxes which are even more difficult for an incomer to predict.
From defending the indefensible on one thing before their "campaigning", the undynamic duo have upped the tally to three, viz:
1. Lloyds TSB / HBOS merger (the ongoing unresolved issue)
2. The GBP 120m held by Ofgem (now confirmed by Darling)
3. Local Income Tax (now confirmed by Darling)
As so often, the first two are all about central control, but the LIT dispute may be a result of the secret Warwick deal with the unions. As always, HM Treasury want to act as prosecuting counsel, judge, jury and executioner.
All three should play well in Glenrothes, but I'll post separately on each.
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#105, #106 U13282939
I'm sure you're right that its likely popularity elsewhere in these isles is a significant factor. NuLab wouldn't want to copy anything popular, would they?
Spot on re affordability, but I do think a 50% discount for the old "starting rate 10%" band would make it fairer still as well as pointedly reminding the public of how hurt "Duff" Gordon was that we're all too stupid to understand why he removed it.
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re - the renewable energy fund held by ofgem.
The Herald was told last night that the Treasury had given careful consideration to this issue but insisted that since the fossil fuel levy for England and Wales has been paid into general UK funding that means that Scotland has already received its share through the Barnett formula.
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if the fund is held by ofgem, then it has not been paid into the general UK funding and it appears that new labour are deliberately with holding the 120 million pound scottish share of the fund that can be put to use in scotland, just because scotland has an SNP government.
further more the treasury say that the fossil fuel levy for England and Wales, was the levy not on all the UK and not just on england and wales ?.
gordon brown and alister darling have ever since the SNP formed their minority government used every trick in the book to cut funding to the scottish parliament and there by to the scottish population.
and they are scottish as well, it just shows that the new labour party's intrest comes before the general public.
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On the subject of passion for the theatre, which BT lurched into at the end of his piece on LIT, I am reminded of a postage stamp, as I was in the distant past a passionate philatelist.
The close relationship between the theatre and the high drama of politics should explain to political cognoscenti why the stamp in question was one bearing a likeness of a politician. It was, in fact, one of a totally unmemorable president of the United States, whom, nonetheless, I remember because I was a philatelist. Unmemorable or not, Franklin Pierce took his place inevitably in my collection because I could not have one stamp in the old series of head-and-shoulder portraits of former presidents without having every one. It seemed to make sense at the time.
So I got to know a little about President Pierce, as I could not very well look upon a likeness of a president about whom I knew nothing. Strange to relate, his story is actually rather interesting and indeed full of drama and tragedy and must have made him the focus of attention throughout the USA in the mid-nineteenth century.
So what was dramatic about this man? When he was president-elect in 1853, a railway carriage that he and his family were travelling in tumbled down an embankment, killing his son and commencing the estrangement of his wife, whose conviction that this was a sign that he should never have ascended to the presidency drove him to drink, of which he eventually died. An image of Lady Macbeth flits through my mind, although largely unjustifiably, I dare say.
In the first year of his presidency Pierce's vice-president expired, leaving him without a VP for the rest of his period in office. Another omen. Then a series of miscalculations and major misjudgments of historic proportions, including attempting to extend slavery to the expanding territories of the West, seemed to confirm the first lady's conviction that he should never have become president and ensured that not only would he have no second term but he would go down in history as one of the worst US presidents ever.
Pierce should have frequented the theatre more often, as Lincoln was to do. It might have put him out of his misery. Despite the high drama of Abraham Lincoln's period in office, he was regularly to be seen at the theatre, soaking up the largely meretricious melodrama that was apparently on offer in Washington then. So people knew where to find him in a relatively insecure environment. And so Lincoln's distinguished presidency was brought to a dramatic end in the theatre by an assassin's bullet.
Until quite recently it was thought that the current UK head of government was destined to go down in history as one of the most unmemorable prime ministers in UK history. Then all of a sudden deus ex machina: high drama intervenes as a momentously historic event transforms the scene and presents the sad occupant of 10 Downing Street with an opportunity to strut upon the stage as a major drama unfolds.
Unfortunately for our hero, the drama begins to reveal that there is something rotten in the state, and it may be only a matter of a few scenes in the first act of it before his responsibility in the tying of the now-unwinding knot of the financial crisis as chancellor of the exchequer brings his centre-stage moment in the role of apparent hero to an end. As the fabric of society is revealed to be rotten, as the fabric of the financial sector of the economy is revealed to be toxically rotten, as the economy rots away in consequence of this and as the UK polity is revealed to be rotten also, we may come to wish that we could forget the Brown period. We shall not be able to do so, however, as the enduring tragedy of it will embrace us all.
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i should point out to everyone that the water/sewerage charge as far as i know is not included in the LIT proposals, so it would still be collected in the normal way i suspect.
the way it stands just now it is a seperate charge from council tax, though it is in the council tax demand letter, but by law the local councils collect it on the water boards behalf.
if the scottish government were allowed to increase the 3% tax rate then it would be possible to also abolish the water/sewerage charge as well and save money on the easier collection of it as well, which would release the councils the expense of collecting it, and the council could then put the savings on that to better uses like schools, social housing ect..
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I am intrigued that the issue of an earnings cap for LIT purposes has not entered the political discussion. In discussions with the business community, Salmond is perfectly open about the fact that of course there will be a cap in order that succesful business types like myself are not taxed into exile. I suspect that this "radioacitve" issue is not being discussed by the SNP because they know LIT is a dead duck and to be seen to be even more pro big business will provide future ammunition to their political opponents.
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Sorry Brian, but I do not see this blether having anything to do with your position at the BBC. Of course that is providing you have not taken over the role of the Arts Journalist due to BBC cutbacks. What could be next on this political forum, Martha Stewart tips on housekeeping or even worse than that, a link to Gordon Browns Downing Street Webpage. God save us, because he wont.
I expected people in the media to baulk at the developing LIT System, after all BBC Pensions are linked to inflation.
Just imagine the money that our wonderful MP's have been hoarding away for their retirement. It would be nice to get even a fraction of that total.We could probably buy the HBOS ourselves from that sort of money.
Stick to your day job Brian, we just about manage to tolerate existing BBC Bias as it is.
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# 22. Reluctant-Expat wrote:
Ah, our precious nationalists are just wonderful, aren't they.
Oh, "wonderful" is the wrong word.....what's the word I'm looking for?......oh yes, "idiots".
... Well tell me ex-pat, what do you contribute to Scotland (other than your snide comments on this blog)? What services do you require day in - day out? What does the union matter to you anyway?
Why so 'reluctant'? Surely there couldn't be a valid reason why you CHOOSE to live in another country? Marriage? A job wityh good money?
Point being that you could CHOOSE to live in Scotland and entitle youself to a valid say in the politics here. whatever country you are in, I don't spout about how that country should run its' affairs and neither should I.
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The objections of Brown & Co are not based on a matter of opinion of the LIT. What Westminster fears is that our English and Welsh Cousins will want the exact system in their respective Nations.
Browns Government is all about bleeding the sheep rather than fairness. If anyone would care to investigate, Brown and Darling have not once mention reining in Government Spending. They have just increased spending of the armed services by 3.5 billion per annum, taking its total to 37.7 Billion per annum.
Correct me if I am wrong but isnt that a similar amount to the money paid out to the Banks, or 5 Billion more than Scotland received in pocketmoney from Westminster. Scary comes to mind.
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114. Didn't you get the memo, Bongo_1?
I have arbitrarily decided that you have no mandate to comment.
To be honest, until your post #19, I didn't know I had the right and/or authority to deny people the right to post opinions on the government of their country, or any subject for that matter.
But if it purges these pages of your childish and ignorant nationalist, anti_UK rants, I might as well use it.
Please delete your user account and confine your 'opinions' to the Herald and Scotsman pages with all the other children.
Many regards and kindest thanks.
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115. LIT has been an LD policy for many years, yet there is little support from English/Welsh voters for precisely the same reasons given repeatedly above and on every occasion before.
And why do you persist in referring to the Holyrood budget as "pocket money" (which was 50bn last time I looked)?
It's negative, highly demeaning to Scotland, childish and not even the slightest bit accurate.
'Pocket money' is something given by families to children to spend on treats, while they don't contribute anything to the family in return.
Is that how you see Scotland?
Grow up, nationalist. You are embarrassing my country.
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112. At 12:26pm on 28 Oct 2008, corporationtax.
re - LIT cap.
"radioactive" sounds like new labour spin.
a sensible government would look a balance of capping the LIT proposal at some point, because if you take someone on 100,000 pounds a year they would pay approx. 2,820 pounds and someone on 1,000,000 pounds a year would pay approx. 28,000 pounds.
its not a matter of favouring big business, its about striking the balance of easing the burden on the poorer members of society and transfering it onto the wealthier members, but not making it to high that the wealthier members relocate to other countries.
you could say that someone with an income of 1,000,000 pounds can well manage to pay 28,000 pounds, but at that kind of charge, then they may consider the relocation, and then the government ends up with nil contributions from that person.
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#112 corporationtax
How utterly selfless of you to let us in of this insider stuff. Care to post some links or sources to back up your opinion?
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I think the idea of a genuine LIT to replace council tax (which clearly has no relationship with a person's ability to pay or personal wealth) is interesting, no just for Scotland but everywhere in the UK. However, I have two questions for those here who have clearly given the matter more thought than me:
1) if it is "national" in the sense of it being levied Scotland-wide, England-wide, Wales-wide etc, then in what sense is it "local" income tax. The principle may still be a good one, I'm not sure, but it needs a new name.
2) if it is levied just in Scotland, but collected via HMRC, then that implies extra work and therefore cost to HMRC but for the benefit of Scotland only. As HMRC is funded by the UK taxpayer (rather than from the Scottish executive), what would happen if HMRC decided to pass on that extra cost to Holyrood, which others within the UK may feel to be fair, then would it still be an attractive option?
These are genuine questions, not intended to influence the debate one way or the other. (I know how sensitive some on here can be).
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120.
1) 'Scottish Income Tax'.....
2) I would think it is completely fair for Holyrood to pay the costs incurred by HMRC collecting this tax on their behalf.
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#116, the only childish rant is yours. You (in a typically unionist style) manage wholly to ignore any questions and spout nonsence.
I repeat, how does the state of the union affect you? Why are you so concerned?
What are you, a Russian aluminium oligarch?
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#120 MalcolmW2
Fair questions.
1) It's "local" in that it funds local government. The terms of the Scotland Act severely limit the powers of the Scottish Parliament to vary taxation.
2) Scotland will pay the HMRC costs of collecting LIT. Anything else would obviously be unfair to the rest of the UK.
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Re: #120 MalcolmW2
These are good points:
1) I think this may be all about perception. From Westminster's viewpoint, anything done purely in Scotland is local as they are dealing with things at a macro (UK) level, whereas if you are one of the good citizens of Inverness or Birmingham or Swansea, then local has a very different meaning. I think you are right, if it is to be set a country level, it needs a new name that allows people to quickly understand it.
2) Once again you are right, there would undoubtedly be extra cost for HMRC, and it should be passed to Scotland as the work is being done for Scotland only. I suppose there is a need to look at overall costs to see if the extra cost is offset by the reduced costs for each council in no longer having to collect council tax for all residents.
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Browndove
That's the point, the real cost of LIT will be felt by the low paid as if you are rich you have accountants to dream up tax avoidance schemes to reduce your income so there will be a hole in the finances. A single charge per property (banded of course) assumes public funding required of X divided across the number of households. With LIT if the rich who should pay more use tax avoidance (which they will) a hole will appear and that means more tax revenue is needed and that falls on the poorer and lower middle income folks who are the I guess majority in Scotland and they will dump the SNP or any party that introduces this out of power. Tax based on income can only for the present come from central government, how that is amended to suit local conditions will be the challenge.
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120. At 2:24pm on 28 Oct 2008, MalcolmW2.
point 1 - you could possible name it :-
scottish local income tax - SLIT
english local income tax - ELIT
welsh local income tax - WLIT
point 2 - as all collections are computerised, then there may be an extra cost to change the computer program, but i see minimal running costs once that has been sorted.
HMCR is funded by the scottish taxpayer as well as the rest of the UK, but it may be that some initial extra charge be made to scotland.
as far as i know, centre 1 in east kilbride is still functioning and collect the PAYE for scotland, and i suppose that all residents in scotland would be transfered to centre 1, including those that are self employed.
why i say the above sentence, is that being self employed my tax is dealt with from liverpool, but i cannot speak for others.
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Two points
One
On the issue of higher taxes making people leave Scotland...........
LIT will in fact represent an overall tax cut for the vast majority of people.
Fo the very well-off that threaten to leave if they are more sensibly taxed -
Let them go. I'll chip in to buy them the tickets out. Sadly they never go, however.
The just stay here and vote against the SNP and Independence
We've plenty of ambitious young people to fill their shoes.
Nobody with ambitions for a better Scotland will go because we bring in a fairer set of taxes- only the greedy - and good riddance.
Two
LIT is certain and will guarantee SNP victory at the next election. I look forward to London Labour going into an election trying to keep £400million plus tax benefit from Scotland's old, poor and infirm
Roll on the next election.
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127. Have you read the latest polls, beautifully summarised here?:
http://www.bbc.co.uk/blogs/thereporters/briantaylor/2008/10/hbos_and_the_theory_of_moral_s.html#comment9
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#117 Reluctant-Expat
"LIT has been an LD policy for many years, yet there is little support from English/Welsh voters for precisely the same reasons given repeatedly above and on every occasion before."
An odd criticism since you have so often on these threads demanded fiscal autonomy for Local Councils despite your unwillingness to recognise the 3% limit within which Holyrood have to live for the time being in your #25.
It's also odd that your "repeatedly" refers solely to your #3, yet you have made no attempt to refute the various comments which disagree with it.
I grant that "pocket money" is perhaps a misnomer for the funds transferred from HM Treasury to the Scottish Government, but surely you would admit that they have something of that character so long as fiscal autonomy is denied. Do you have a better suggestion for naming them?
#120 MalcolmW2
#121 Reluctant-Expat
What extra costs on HMRC do you anticipate?
Their new computer systems will obviously have been designed with this in mind as it has been discussed for many years and an option of Scottish Governments since '99, just as they will have been designed for the common european currency since the late '70s when it was agreed as an EEC goal and certainly since '97 with the manifesto commitment to enter the euro when the time is right.
Calculation and collection will be by PAYE in the main and Self-Assessment for most of the rest.
Enforcement will be for the entire tax bill, as before.
It should not involve the addition of a single person to the database of taxpayers, which already collects and maintains National Insurance contributions for separate use.
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#125 Vinanglais
So are you now disowning your own #98's "significant change and cost within local government, collections charges will rise as many will refuse to pay" and "poll tax riots" in favour of saying that tax avoidance will increase? If so, is that not something for HM Treasury to fix anyway, as the Federal LibDems want? Do you believe every income tax is doomed to avoidance by the better off?
On what do you base your: "Tax based on income can only for the present come from central government"? I have yet to hear anyone in the UK government say so, let alone explain why.
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#128 Reluctant-Expat
As your post #9 on the new thread has been referred to the mods, why not post just facts and links here?
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Game,set and match to LIT if I'm not mistaken.
On to the next silly unionist arguement chaps.
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I normally follow this blog on a daily basis but renouncing all allegiance to foreign princes and potentates (and voting in the Presidential election) took me away from watching what is going on the other side of the Pond. Then I come back here to find 130-plus comments and only one or two that address one major issue.
If LIT, as amended, is to be implemented it requires a change in the Scotland Act to include unearned income. Either that or Jeremy Purvis has a rather flexible mind. I'd love to see his thinking. Without that, any discussion is purely hypothetical. It also explains why the SNP proposals only included earned income. Clearly Alex Salmond thought it would be wise to comply with the law that gives the Scottish Parliament its power. Smart man.
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132. Is that how it works? I just can't keep up with the rules.
I see that it is game, set and match to the entire unionist argument. If I'm not mistaken.
On to the next silly independence campaign:
Free by 2053.......?
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#133 Skip_NC
Well spotted. I certainly hadn't thought that one through and you're quite right that Part IV s73.(3) of the Scotland Act 1998 quite specifically excludes income from savings and distributions from the tax-varying power.
It certainly makes sense to go without it initially before seeking an amendment from Westmidden. The new thread's on to LIT as well now.
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#134, completely skipped over my previous #122, I can only assume because there is no answer to it.
You cannot argue with these people.
I see Scotland fighting for its right to self determination and fighting hard every day against blatant London based fiscal discrimination under this 'breath of fresh air' SNP government... I suggest any foreign ex-pat's who have been away for a while maybe celebrate homecoming and actually come home and see what is going down in Scotland. It sure as heck appears that it is difficult to see whats going on from afar!!!
Possitivity, can do attitude and Saor Alba!!!
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#135 Brownedov
It's a pretty critical issue, in my view. I think the SNP would be asking for a showdown with Westminster if they go ahead with the amended plan - one that they will lose (rather embarrassingly, I may suggest) as things stand at the moment.
I think it was Ed Iglehart who suggested there may be merit in getting independence and then implementing local taxation that is appropriate for each locality - one or all of local sales, property or income tax for instance. So districts with a large number of second homes might weight their taxation towards property. If those homes are rented out, they may choose a short-term rental tax (very popular here in North Carolina, especially in the Blue Ridge mountains or at the beach). However, as things stand, I think the government (the one in Holyrood, lest there be any doubt) has its hands tied.
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#137 Skip_NC
Point taken, but I suggest discussing this on the new thread.
As it's 2330 CET for me, I'll be calling it a night soon anyway.
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Brian:
Tax changes are often entertaining because; most politicians want to see if the ideas of taxing services will work or not...
~Dennis Junior~
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