Salmond and Sturgeon Want the English Fish for More Fat Subsidies

Generali

Leanne1812 wrote: »

It's already been discussed mister. The gov have to raise across all tax bands equally as I understand it. Does that make sense, raising the lowest earners tax? C'mon people at the bottom of the rung being taxed more, do you think that will work? Doesn't sit well with me.

Given the nature of tax an increase across the board will hit the rich more than the poor. If the idea is to take that money and spend it on the poor than there is a net gain to the poor.

The really poor don't pay income tax at all and pretty much nobody under the median income pays much in income tax.

Generali

HAMISH_MCTAVISH wrote: »

But it would set up a real discussion in Scotland as to how the extensive new powers should be used for the next 4-5 years.

Let me take a wild stab in the dark.

The SNP policy is to use none of the new taxation powers and blame it all on those [STRIKE]damn English, bottom-feeding, pig fiddling, public school educated scum[/STRIKE] in Westminster.

Mistermeaner

But gen thems is facts.

Leanne1812

Generali wrote: »

Given the nature of tax an increase across the board will hit the rich more than the poor. If the idea is to take that money and spend it on the poor than there is a net gain to the poor.

The really poor don't pay income tax at all and pretty much nobody under the median income pays much in income tax.

Yep, I get that Gen and I know the threshold has increased but it still makes me feel the lowest earners, those who have the least to spare will pay more. I worry it will force people into the mindset of why bother working when I can have more claiming benefits. Wrong I know but when trying to progress in life seems futile it must knock the stuffing out of people.

Leanne1812

I'm enjoying this chat but needs must, taking dear mother Xmas shopping today.

I'll catch up later, cheers people. It's been very civilised today

Generali

Leanne1812 wrote: »

Yep, I get that Gen and I know the threshold has increased but it still makes me feel the lowest earners, those who have the least to spare will pay more. I worry it will force people into the mindset of why bother working when I can have more claiming benefits. Wrong I know but when trying to progress in life seems futile it must knock the stuffing out of people.

But it just won't.

If you tax everyone and pay the money to some people then the winners are the people that are paid for collecting the tax and the people that get the net payment (excluding the fact that a weaker economy makes it harder for poor people to become rich).

Generali

Leanne1812 wrote: »

I'm enjoying this chat but needs must, taking dear mother Xmas shopping today.

I'll catch up later, cheers people. It's been very civilised today

Xmas shopping in October is a good effort! May your next Government be as organised as you and I wish your mother the very best.:j

CLAPTON

Leanne1812 wrote: »

It's already been discussed mister. The gov have to raise across all tax bands equally as I understand it. Does that make sense, raising the lowest earners tax? C'mon people at the bottom of the rung being taxed more, do you think that will work? Doesn't sit well with me.

Kezia makes her speech this afternoon, I'll see what she has to say and no doubt there will be a discussion to be had. Maybe she will show Labour are progressive. I won't pass judgement just yet.

it's really simple if the SNP really wanted to do it

raise the tax rates so yes the all tax payers pay a little more including the lower paid.

give benefits to the poorest so the net effect is a gain and the pain is the higher paid. All part of a fairer and more equal scotland

not rocket science

HAMISH_MCTAVISH

Leanne1812 wrote: »

It's already been discussed mister. The gov have to raise across all tax bands equally as I understand it. Does that make sense, raising the lowest earners tax? C'mon people at the bottom of the rung being taxed more, do you think that will work? Doesn't sit well with me.

The interesting thing about this from an economics perspective isn't the fairness of it, (although that's an interesting topic on it's own), it's the fact that raising tax on high earners has historically been shown not to actually raise very much extra revenue in the UK at all.

From the days of most rock stars moving abroad decades ago to the failed 50% tax band experiment recently, increasing tax bands for high earners has raised virtually nothing in extra revenue for the government.

The only way to materially increase tax revenues is to hit the middle earners and poor as well, whether that be directly through income taxes, or through stealth taxes on driving, smoking, drinking, etc.

And this situation would likely be worsened dramatically if there are two different rates in Scotland and England.

A unified tax rate throughout the UK is a really significant deterrent to tax dodging for the working and middle classes.

It's easy for the genuinely rich to pick up and leave for another country or change their income types or distribution to avoid taxes, which is why it's better to tax them at a level they're actually willing to pay rather than risk them or their money leaving.

But it's far, far less easy for the working and middle classes to move abroad or to move their income types or distribution out of higher tax brackets.

However in the UK where nations offer multiple tax rates depending on location, it becomes far easier to avoid paying higher taxes.

As an example a service engineer or sales manager on 30K to 50K a year covering Scotland and the Northern part of England has no incentive or disincentive to live either in Carlisle or Dumfries at the moment.

But increase his/her tax by 3% or 4% or 5% if they live in Scotland versus England and all of a sudden middle earners working from the central belt downwards, and even low earners living near the border, have a real incentive to move out of the high tax jurisdiction.

And for higher earners (not just the rich), for example the bankers and lawyers working in London and living in Scotland, or mobile professionals like pilots, oil workers, engineers, creative types, consultants, etc, the choice to move over the border becomes an absolute no-brainer.

So unless you tax the poor and the non-mobile middle earners that can't avoid it, any increase in tax rates could well end up delivering less money for the government in Scotland.

Of course the opposite is also true...

If Scotland had a lower tax rate than England it could attract more people to live within it's tax jurisdiction and consequently earn more in revenue from a lower rate.

But I suspect that's not likely to sit well with the socialist central belt elements in either Labour or the SNP.

Shakethedisease

Well since the tax powers from the old Scotland Bill don't come into effect until next year.. and the ones from the new Scotland bill aren't even at the report stage yet so no-one knows how long it will be until they come into force..

There's little point whinging about what the SNP will or won't do 'at some point' in the future. I'm afraid you just don't know. Kezia is talking about tax raises from the new Scotland bill... which again, isn't even through the HOC yet. It's doubtful she'll even last herself past next May. So then we'll have no idea what Labour will or won't do either.

At the end of the day. No-one wants taxes raised simply in order to mitigate Tory cuts just to stand still. It's not and never has been, the Scottish Govt's job to mitigate Westminster/UK wide reserved policies, while such matters remain reserved and implemented UK wide. End of.