Salmond and Sturgeon Want the English Fish for More Fat Subsidies

Leanne1812

Thrugelmir wrote: »

SNP budget was pretty nondescript. The days is approaching when they are going to have to be accountable themselves to the Scottish electorate. Seems the Property Tax revenue was optimistically miscalculated. The question is then are "they" competent enough individuals to manage an entire economy? Given the failure to be even close to such a trivial figure. Seems they overlooked the fact that people would buy early to avoid paying it.

If you throw lots of boomerangs expect them to come back to hit you.

Can you link to this miscalculation please? I've googled but cannot find anything recent. The article I read does mention though how the chancellor did take a leaf out of Mr Swinney's book with his property tax reforms.

HAMISH_MCTAVISH

Leanne1812 wrote: »

Can you link to this miscalculation please? I've googled but cannot find anything recent. .

Here you go....

Scotland’s Land and Buildings Transaction Tax (LBTT) – the replacement for Stamp Duty Land Tax north of the border– is forecast to have a shortfall of some £43 million, figures have shown.

Deputy First Minister John Swinney’s projections had predicted that LBTT would raise £235 million for Scottish coffers in 2015/16. Unfortunately for the SNP, official figures from Revenue Scotland have revealed that between April and September, the Scottish tax authority received just £96.2 million from the SDLT replacement. If revenue collection was to continue at this rate, approximately £192 million would be collected in 2015/16 – a shortfall of £43 million.

The move to scrap SDLT has been fraught with controversy and LBTT itself has divided opinion with some describing it as “progressive” and others labelling it a “tax on aspiration”.

http://www.oneegroup.com/newsroom/scotland-s-new-property-tax-faces-revenue-shortfall-of-18/

Without commenting too much on the SNP aspect, if the current pattern continues and the shortfall is that massive, it does illustrate just how difficult it is for any party to increase revenue by ramping up the tax rate.

It's something which is well known in economics but little understood by some politicians and by even fewer party supporters, that increasing tax rates can decrease tax take, as ultimately many financial transactions are optional.

If you raise taxes on people in Scotland but not in England, many of those with something to lose will simply move to Carlisle.

If you raise tax on companies in Scotland but not in England, many companies will simply relocate into England.

With Stamp Duty increases, many people will simply choose not to sell, and instead to extend or renovate.

Raising taxes to cover a budget shortfall is bl00dy hard in the best of times... But even harder when there's a lower tax jurisdiction right next door.

Leanne1812

Thrugelmir wrote: »

Not surprising though. As Labour in the broadest sense have an identity crisis. Up until 2007 whether you loved them or hated them you knew what they stood for. Blair isn't a stupid man so knew when to jump ship and disappear off to foreign lands to distance himself. Since then they've been in effective turmoil and decline. The Blair\Brown partnership that sellotaped the party has gone. Leaving very visible fundamental disagreement as to forward policy. In fact there's been little to no real policy on certain issues for years now. Until there is. Only dyed in the wool hard liners are going to turn out.

This is a huge problem for Labour. I cannot see a turnaround particularly in Scotland anytime soon. Another weak leader here who will no doubt be gone after May 16.

We need a credible opposition up here with policies people will support. No one seems to be offering that except SNP. You may say they are nice sound bites or pie in the sky but the fact is the polls show support is growing. The other parties waste a lot of precious media time telling us how bad they are instead of what they might do to improve important issues.

My friend has just registered a new party in Scotland, they're called Unity. No need to tell you he is very pro Union. They too spend a lot of time condemning the SNP but when probed about what they would do differently it is all very vague. It's easy to criticise but no one will say what they will do that's any different. Very frustrating.

Leanne1812

Thanks for that Hamish.

Can I ask do you disagree with the new tax? Was it a bad idea from Mr Swinney? Just interested in different views & opinions.

Thrugelmir

Leanne1812 wrote: »

This is a huge problem for Labour. I cannot see a turnaround particularly in Scotland anytime soon. Another weak leader here who will no doubt be gone after May 16.

My money would back David Milliband to be the new leader. Though not until shortly before the next election. This may well a game changer in Labours fortunes. As he'll come back wiser , more experienced and certainly a respected statesman after his stint abroad.

Leanne1812

Thrugelmir wrote: »

My money would back David Milliband to be the new leader. Though not until shortly before the next election. This may well a game changer in Labours fortunes. As he'll come back wiser , more experienced and certainly a respected statesman after his stint abroad.

I think it's fair to say the wrong brother was chosen first time around. Who knows, we may have had a labour gov had they gone for David.

HAMISH_MCTAVISH

Leanne1812 wrote: »

Thanks for that Hamish.

Can I ask do you disagree with the new tax? Was it a bad idea from Mr Swinney? Just interested in different views & opinions.

Stamp duty in general is one of the worst taxes you could imagine if your goal is to alleviate housing shortages.

When you want to encourage people to move up or down the property ladder at different points in their life to suit their needs, and not hoard or be stuck in property that is not right for them, then the last thing you want to do is tax them when they move.

So yes, I disagree with it, and think we should have done something radically different.

Putting that aside, the system of stamp duty bands has always skewed the market at different price points, and the new system is no different in that regard.

Which is a shame as Swinney had the choice to do something different and chose not to...

But even within the context of retaining a 'traditional' stamp duty banded system, clearly the new Scottish rates are set too high and we've tipped over the wrong side of the Laffer curve, as evidenced by the fact high value transactions have fallen off a cliff and resulted in lower tax revenue for Scotland.

There's no point 'soaking the rich' if it ends up raising less money...

Leanne1812

HAMISH_MCTAVISH wrote: »

Stamp duty in general is one of the worst taxes you could imagine if your goal is to alleviate housing shortages.

When you want to encourage people to move up or down the property ladder at different points in their life to suit their needs, and not hoard or be stuck in property that is not right for them, then the last thing you want to do is tax them when they move.

So yes, I disagree with it, and think we should have done something radically different.

Putting that aside, the system of stamp duty bands has always skewed the market at different price points, and the new system is no different in that regard.

Which is a shame as Swinney had the choice to do something different and chose not to...

But even within the context of retaining a 'traditional' stamp duty banded system, clearly the new Scottish rates are set too high and we've tipped over the wrong side of the Laffer curve, as evidenced by the fact high value transactions have fallen off a cliff and resulted in lower tax revenue for Scotland.

There's no point 'soaking the rich' if it ends up raising less money...

You'll need to enlighten me here, what is the connection with stamp duty and housing shortages?

I can't disagree with your points but I will ask what should the radical change be?

Generali

elantan wrote: »

The SNP BAAAAAAAADD currently going on from Labour about the FRB is hilarious, not sure if anyone's been following it or not ... just wanted to share

Have a guid holiday everyone

Haha. SNP not as guid as their supporters think I reckon. SNP baaaaaad is a pretty good meme that SNP supporters have come up with as a way of deflecting all criticism.

Innit, cor blimey guv. Knees up muvva Brown.

HAMISH_MCTAVISH

Leanne1812 wrote: »

You'll need to enlighten me here, what is the connection with stamp duty and housing shortages?

Stamp duty is a barrier to people moving.

Lets say I am living in a 4 bedroom house with just my wife, and I want to downsize to a 2 bedroom house in the same area.

Lets also say there's a family with 5 people living in a two bedroom house in my area, and they want a 4 bedroom house.

In my area, we'd each pay stamp duty of many thousands of pounds just to move.... which makes it harder for people with big families to move up the ladder to larger houses, and for older people nearing retirement to move into smaller houses once the kids leave.

In essence, stamp duty is a barrier to efficient allocation of stock, so it worsens the housing shortage.

I can't disagree with your points but I will ask what should the radical change be?

Ideally you'd abolish stamp duty.

Failing that you'd at least smooth it out a lot more.

It's politically lovely to bribe the masses and remove transactions under 140K from stamp duty, but economically speaking it's something that economists like to call.... 'bonkers'.

There just aren't enough transactions at higher levels to compensate, and if you do ramp up the taxes, people at higher levels simply don't transact...

So you have a whacking great budget shortfall. Like we do now.

This isn't, by the way, a particular dig at the SNP.

Politicians of all flavours are guilty of being economically illiterate and trying to bribe the electorate for short term popularity.

It almost always backfires in the end though....