[Closed] Tartan austerity

Oh do bore off, eh?

.... totally different from those nasty, nasty Tories.

Sometimes THM I could swear that you are Tory. But of course you claim to be "politically neutral".

It was that good?!?

The obsession continues...

Avoid the swear box then Ernie.

Love to see some new policies especially when delivered with a strong democratic mandate. A refreshing change....

We can see how the different policies pan out nice and clearly now....

According to the opposition parties in Scotland, it was a terrible budget because SNP Bad, but they can't think of anything specifically they would do differently. So business as usual, really.

I'm not too impressed with the way the roads budget is up and rail is down.

I'm not too impressed with the way the roads budget is up and rail is down

Forth road bridge will cost a lot as will disruption, and caledonian sleeper staff on strike, despite huge funding from the government to keep it running

According to the opposition parties in Scotland, it was a terrible budget because SNP Bad, but they can't think of anything specifically they would do differently.

Probably because they are all as right-wing as the SNP.

I think it's probably more that they're resigned to being in opposition for the next decade at least, so don't need to have any actual policies of their own, just some attack phrases.

That, and they're scraping the bottom of the talent barrel.

They should've knocked a penny off tax, and sucked up the cost centrally. Politically it'd blown all the opposition away.

Even better would be a couple (or more) percentage off Employers NI - could've grabbed a goodly lump of the back-office/call-centre market.

There are enough projects/depts that could've taken a hit for the money - if anyone thinks otherwise logon to http://www.publiccontractsscotland.gov.uk/ and see the kinda stuff that's been bought.

The opposition are blown away anyway, and a race to the bottom tax-wise isn't really a good idea.

[quote=bencooper ]I think it's probably more that they're resigned to being in opposition for the next decade at least

The opposition being Scottish Labour? So they're maintaining links with the UK party then.

The opposition are blown away anyway, and a race to the bottom tax-wise isn't really a good idea.

[s]the love that dare not speak its name appears again
[/s]

sorry it much more like the loathe that will not shut the **** up

NHS waiting times in Scotland seem to be doing better than some, surely that's good thing.

I think the SNP can, and will, weasel themselves out of this one purely on the back of how the 10% Scottish tax rate works at the moment. It's 10% across the board. The SNP are never going to increase tax for the 40%ers if it means the same increase for the 20%ers. Likewise, they'll never lower tax for the 20%ers if it means lowering it for the 40%ers too. The politics of envy don't work this way, and this I can understand.

What is utterly unforgivable is the stupid, ridiculous 9-year freeze on council tax rises. A 12 year old could tell you that stuff costs more now than it did 9 years ago, so why the insistence on strangling council budgets? Who benefits from this? Middle class folk who get their groceries delivered and so don't travel on public transport, rarely require help from social services, and get their bins cleaned weekly by some entrepreneur or other. Who are the ones who suffer most from this? The poorest of the community, the ones the SNP claim to be the party of. Sure, they may have an extra couple of hundred quid a year, but when you have fewer travel options, fewer jobs, fewer services to access, less opportunity, then what good is it? The SNP are an absolute shower of wastrels, morally, politically and ethically bankrupt, and the sooner the electorate wake up to this the better. But no; as long as they're shouting from the rooftops against whatever the majority opinion in Westminster is, regardless of how damaging that ends up being for Scotland, then seemingly all is good. And no, mindless SNP drones of STW-ville, "well we're no worse than anyone else" is not a mitigating factor. Especially when you [i]are[/i] worse than everyone else, by almost any metric you care to use.

Agree re council tax. It's an odd policy and used to blackmail the local authorities. Be interesting to see how the SNP would respond if councils organised themselves a bit more effectively and resisted the freeze jointly. Something has to give as local authority budgets have been slashed and I know this can be partly attributed to the money from Westminster but the SNP should, and could, be doing more.

What is utterly unforgivable is the stupid, ridiculous 9-year freeze on council tax rises. A 12 year old could tell you that stuff costs more now than it did 9 years ago, so why the insistence on strangling council budgets?

Who benefits from this?

Everyone else improves efficiency. Councils can too.

Very few benefit from social care eligibility criteria being raised to ridiculous levels because there's no money left, nor Social Workers having caseloads of 50 plus because there's no money for more staff. Very few benefit from libraries and leisure centres closing either. Yes, efficiencies needed to be found, and in my experience have been mostly. You can't keep on making the same savings, year on year, with budgets frozen and declining in real terms.

The cuts have to come somewhere - the Scottish Government can mitigate some of them, but there's only so much that can be done. So the question is not whether budgets should be cut, it's which ones - cutting council funding with a freeze isn't brilliant, but what's the alternative? What should be cut instead?

Polling also shows that council funding is the most popular thing to cut. That might be because people don't really understand what councils do, but it's a fact.

Although I would willingly pay more council tax, as I work in social care which has been cut drastically, I do think that a major reform is needed possibly a combination of land value tax and local income tax. However raising council tax wouldn't solve the problem as it accounts for about a 15% *of council funding. To really ease the cuts requires an increase in the block grant from Holyrood which realistically requires an increase in their block grant from Westminster. As this will not be forthcoming Swinney was correct to deliver a cautious budget until we know what the new fiscal framework will be. [url= http://www.gov.scot/Topics/Government/local-government/17999/CoreRevenueFunding/Revenue-Funding-Streams ]* source of figures [/url]

Why does it have to be cuts? Especially given the Tory Austerity narrative forced down our throats every verse end? The Scottish Government have had the ability to adjust income tax by +/- 3% since 1998, and come April 2016 can do what they like with the special Scottish 10%. On the indyref threads everyone always says how they'd be more than happy to pay a bit more if it meant a fairer Scotland. The problem we have is that it doesn't suit the SNP's "Westminster hates us, independence is the only solution" fairytale to actually use the powers they have for the good of Scotland.

I think the OP's remarks where directed at the Holyrood budget not the Council Tax freeze which according to the Scottish Parliament Research Centre has cost the Scottish government £2.5 billion and has resulted in overfunding.

What happens to future local authority services remains to be seen after a 3.5% reduction in funding.

To really ease the cuts requires an increase in the block grant from Holyrood which realistically requires an increase in their block grant from Westminster.

The Scottish Government have had the ability to adjust income tax by +/- 3% since 1998, and come April 2016 can do what they like with the special Scottish 10%.

The problem at the moment is that rates can only be adjusted together - can't raise just the top rate, for example. Can't adjust the bands either. Once the extra Scotland Bill powers come in, there is a little more latitude to play with but still nowhere near enough to avoid the austerity being forced on us.

To be paid for how?

Borrowing. Almost every economist thinks Osborne's idea of running a surplus is lunacy, no other country in the world apart from one runs a budget surplus. Only Norway do, because they were smart enough to invest their oil revenues.

Which way do you want to have it flying ox as bettertogether often claimed that raising taxes in Scotland would result in a flight of higher rate tax payers over the border.
More importantly you noticed yourself that there's no power to change the tax bands so very same low paid folk hit hardest by the cuts would be hit by a tax rise

I think the OP's remarks where directed at the Holyrood budget not the Council Tax freeze

Once the extra Scotland Bill powers come in, there is a little more latitude to play with but still nowhere near enough to avoid the austerity being forced on us.

Your best hope in that case is probably a Labour government in Westminster, rather than an English tax-haven for wealthy Scots.

Are you thinking of voting Labour next general election?

Are you thinking of voting Labour next general election?

If we had PR and a federal system of government, yes - I'd almost certainly be a Labour voter (or maybe Green). But we don't - I still think Westminster is fundamentally broken and incapable of fixing itself, so the only solution is Scottish independence.

Forgive me, but I'm pretty sure the council tax freeze formed part of Swinney's budget for 2016-2017

The announced 3.5% reduction in Holyrood funding is new and it contrasts with the extra £2.5 billion which the council tax freeze has cost Holyrood.

You've been banging on about what has happened for the last 9 years not what will be happening in the future.

Almost every economist thinks Osborne's idea of running a surplus is lunacy, no other country in the world apart from one runs a budget surplus. Only Norway do, because they were smart enough to invest their oil revenues.

Which way do you want to have it flying ox as bettertogether often claimed that raising taxes in Scotland would result in a flight of higher rate tax payers over the border.

So are Norway smart, or lunatics? From your description I can't decide

They were smart enough to invest their massive oil wealth so they could run a budget surplus. We didn't, so we have to run a deficit like every other country on the planet.

You've been banging on about what has happened for the last 9 years not what will be happening in the future.

introducing a 30% inbetween the 20% and 40% bands

Before you go, given you pro-indy lot are always spouting about fairness, how is raising the 40% rate fairer than what I have suggested? Politics of envy again?

This is what pisses me off about tabloid-reading armchair chancellors*. Someone earning £60k (£17874 to HMRC, takes home 70% of salary) already pays disproportionately more to HMRC than someone on £20k (£3313 to HMRC, takes home 83% of salary).

And you think it's fair to tax the £60k earner even more? That's why percentages are used in the first place - you earn more, you pay more.

£60k jobs don't grow on trees. They tend to involve A LOT of training/experience/expertise and more-often-than-not a University degree, which are incidentally harder to get under the SNP government if you come from a poorer background. But no. Protect the middle class voters kids in your budget, whatever you do. Don't piss off the middle class voters. Or the lower class for that matter. Just promise them the world. We'll figure out how it's going to be paid for later.

*disclaimer - I'm a [i]broadsheet[/i]-reading armchair chancellor

Swinney said council tax would (yet again) be frozen for 2016-2017. That's in the future when I come from.

You changed tack after I pointed out that according to the Scottish Parliament Research Centre the council tax freeze has cost the Scottish government £2.5 billion and has resulted in overfunding.

Up to that point you wanted to talk about the last 9 years, which I'm sure isn't the future even where you come from.

Just to remind you :

The Flying Ox - Member

What is utterly unforgivable is the stupid, ridiculous 9-year freeze on council tax rises. A 12 year old could tell you that stuff costs more now than it did 9 years ago, so why the insistence on strangling council budgets? Who benefits from this? Middle class folk who get their groceries delivered and so don't travel on public transport, rarely require help from social services, and get their bins cleaned weekly by some entrepreneur or other. Who are the ones who suffer most from this? The poorest of the community, the ones the SNP claim to be the party of.

You now want to talk about the budget and its possible implications for the future.

The Flying Ox - Member

The Scottish Government have had the ability to adjust income tax by +/- 3% since 1998

A power carefully designed to make it unusable for increases, because it can't be used to tune rates- it can only increase/decrease all rates by the same amount. The entire purpose of the policy was to be able to say "we devolved this but they don't use it". Remains to be seen what happens once they're given useful powers to be fair, I've a feeling they'll bottle it. Different rates within a single country has some major issues.

On the subject of the council tax freeze- people often seem unaware (or pretend to be unaware) that it's been almost exactly matched by the additional funding from central government. And that at the same time the centralisation of fire and police has taken that burden off councils.

The settlement has meant that councils are actually [i]better[/i] off than they would have been if they'd increased council tax by rpi. And council's share of scottish spending is nearly identical to what it was before the freeze.

Meanwhile, south of the border, they're halfway through a 40% cut to council budgets.

In my opinion it's fairer that those who can afford to should pay a little more. Perhaps the value of assets owned such as land should be taken into account as well as income.
Also just noticed your reply to my post about the block grant. The point I wanted to make is that there's no chance of an increase in the block grant under Cameron and Osbourne. Yet this block grant is in turn passed on to councils making up 85%of their funding so if you want to stop cuts to council services you have to look at the block grant not at council tax. We need a new system of funding for local government and we need much better stronger local government

In my opinion it's fairer that those who can afford to should pay a little more. Perhaps the value of assets owned such as land should be taken into account as well as income.

I'm sorry, but "increase the 40% tax rate" just sounds like envy of those who have more.

A power carefully designed to make it unusable for increases, because it can't be used to tune rates- it can only increase/decrease all rates by the same amount. The entire purpose of the policy was to be able to say "we devolved this but they don't use it".

It remains to be seen what happens when full control of the SRIT can be used without the threat of an election looming. I half-agree with you, in that I think they may bottle it, but I also half-expect them to go with gordimhor's suggestion of ratcheting up the tax on the 40%ers because it will pander specifically to the non-aspirational mouthbreathers who think that anyone earning more than £30k should be shot for either having the audacity to strive beyond their meagre upbringing, or being an old-money landed-gentry buy-to-let-landlord parasite.

The Flying Ox - Member

This just highlights the hypocrisy of all the indy-fanatics I've ever spoken to. They're all apparently perfectly happy to pay more tax if it means a fairer Scotland. So why won't the SNP use the power? Because everyone's lying through their back teeth and would rather vote in the Tories over a 2% income tax rise. In secret, of course.

Yep, that's exactly what it is 😆

Or alternatively, most people think it's wrong to increase tax more for lower earners more than twice as much as you do for higher earners. A 2% increase on base rate is 10%, a 2% increase on higher rate is 4.44%. A 5% increase is 25% and 11.1%.

This isn't the politics of envy, it's the politics of sanity. The taxation powers were designed to be crippled and unfair, and to be unused by any of the feasible governments of scotland. It's a silly artificial restriction that served no other purpose- and if Westminster thought it was such a good idea to tie increases, why was it not introduced nationally?

TBF I've never seen anyone seriously dispute this; people make political capital off it by ignoring the reality of the powers but who thinks it's a good idea to use it?

There's little sanity in politics, no matter what the rosettes colour or claimed aims.

In my opinion it's fairer that those who can afford to should pay a little more.

Yes, but 'fairness' doesn't increase overall tax revenue for all the well known reasons.

They were smart enough to invest their massive oil wealth so they could run a budget surplus.

So if we were 'smart enough' we could invest our non-oil wealth so we could run a surplus.

You need to explain why one country investing is wise, whereas another country investing is dumb.

Flying ox I didn't make it clear. I think there is merit in the idea of raising the tax threshold to the equivalent of the living wage as defined by The Scottish Poverty Alliance. I would increase the higher rate of tax or establish a 3rd "even higher " rate for those on very high income. I can do all this without feeling any desire to shoot any one.

Yep, that's exactly what it is

Or alternatively, most people think it's wrong to increase tax more for lower earners more than twice as much as you do for higher earners. A 2% increase on base rate is 10%, a 2% increase on higher rate is 4.44%. A 5% increase is 25% and 11.1%.

This isn't the politics of envy, it's the politics of sanity. The taxation powers were designed to be crippled and unfair, and to be unused by any of the feasible governments of scotland. It's a silly artificial restriction that served no other purpose- and if Westminster thought it was such a good idea to tie increases, why was it not introduced nationally?

TBF I've never seen anyone seriously dispute this; people make political capital off it by ignoring the reality of the powers but who thinks it's a good idea to use it?

Those numbers ignore the personal allowance, which has a pronounced mitigating effect. To give them their due, the coalition and the Conservatives have raised the allowance:

[url= http://chokkablog.blogspot.co.uk/2015/12/swinney-confused-or-aiming-to-confuse.html ]http://chokkablog.blogspot.co.uk/2015/12/swinney-confused-or-aiming-to-confuse.html[/url]

I do think the SNP are painted into a corner in that their rhetoric of greater equality etc doesn't match the likely effects of them squeezing the rich, creating a skewed tax rate within one country. This is partly of their own doing as they promised the Scots the moon on a stick in the event of a Yes vote, but are now being bruised by fiscal reality I think.

How long is the commute from Newcastle to Edinburgh/Glasgow these days for all those financiers, lawyers and doctors who would be squeezed by higher taxes on the wealthy but probably aren't quite wealthy enough to employ accountants to tax dodge for them? In that circumstance, do you pay your taxes in your country of domicile or employ? Serious question. Same question for an iScotland with a Schengen-style open border?

Or alternatively, most people think it's wrong to increase tax more for lower earners more than twice as much as you do for higher earners. A 2% increase on base rate is 10%, a 2% increase on higher rate is 4.44%. A 5% increase is 25% and 11.1%.

How about actual pounds and pence? A 2% tax rise across the board would have someone earning £20k paying an extra £188/year or £15.67/month. Someone earning £60k would be paying an extra £988/year or £82.33/month. If you look at it this way then I'd say the [i]higher[/i] earner has had the greater increase to their tax burden, not the lower earner. If you still want to do percentages, the £60k earner's extra tax from a 2% rise means a 2.36% reduction in take home pay while the £20k earner has a 1.13% reduction in take home pay.

Why do people assume that the higher earner must just have this £82.33/month sat in a jeans pocket somewhere doing nothing and not being missed, purely on account of them being a higher earner? It's still money that can't be spent on anything else. Should they not be allowed that money? Why not?

I can do all this without feeling any desire to shoot any one.

In my defence, I never said [i]you[/i] were mouthbreathing or non-aspirational, just that "squeezing the rich" is likely to appease that kind of individual.

When does taxing those who can afford a little more stop? When all their income above £42k is payed in tax. For many paying 40% the figure is already really 50% with NI.As for who can afford it, that's one way running an economy comrade, straight into ground. We as a population seem to have lost the idea that in most cases there is a connection between contribution and income. Fairness doesn't really come into it, in a market economy you have to pay for the skills and commitment you need.

I still think Westminster is fundamentally broken and incapable of fixing itself, so the only solution is Scottish independence.

@TheFlyingOx the most important political point about tax rises is to tell the electorate someone else is paying, obviously "the English" / Westminster plus then of course to make refernces to plundered / mismanaged / wasted oil revenues. Nationally now in the UK the top 1% pay 27% of the personal taxes, but for politicians its fertile grpund as they can afford to pay more and they are like a pot of gold at the end of the rainbow

I concede that you do have a point about taxation stumpyjon.There's no bottomless pit of money. Then you open up a much bigger issue

Fairness doesn't really come into it, in a market economy you have to pay for the skills and commitment you need.

[i]How about actual pounds and pence? A 2% tax rise across the board would have someone earning £20k paying an extra £188/year or £15.67/month. Someone earning £60k would be paying an extra £988/year or £82.33/month. If you look at it this way then I'd say the higher earner has had the greater increase to their tax burden, not the lower earner. [/i]

+1

Which is why I suggested a 1% cut of base rate tax, because it benefits EVERYBODY.

And taking it from the other direction. Just because I earn more, why should I pay a GREATER percentage.

Slightly OT, but has there been any research into the physiological impact of working full time, but still not earning enough and falling back on state hand outs?

Edit, and I mean research not opinion pieces.

[i]Slightly OT, but has there been any research into the physiological impact of working full time, but still not earning enough and falling back on state hand outs?[/i]

No idea, but can't imagine the average person really considers it - it's just "income" as far as they are concerned. A bit like how Farmers, companies and other business-recipients of taxpayers money just see it as "income".

The Flying Ox - Member

I've slept on this, and I'm afraid I still don't know what you're getting at. The numbers don't add up. Plus, it's easy to obfuscate when we use percentages.

Just doublechecked and they do add up. Why don't you try and show me the error?

I'm not sure why this is controversial tbh. 20% to 22% is a proportionally greater increase than 40% to 42%, which is proportionally greater than a 45 to 47%, because of maths.

And I'm working with percentages because that's how tax works and because it's the best way to show the impact of a percentage change in tax.

The Flying Ox - Member

How about actual pounds and pence? A 2% tax rise across the board would have someone earning £20k paying an extra £188/year or £15.67/month. Someone earning £60k would be paying an extra £988/year or £82.33/month. If you look at it this way then I'd say the higher earner has had the greater increase to their tax burden, not the lower earner. If you still want to do percentages, the £60k earner's extra tax from a 2% rise means a 2.36% reduction in take home pay while the £20k earner has a 1.13% reduction in take home pay.

Your numbers are wrong; I'm not sure where you've gone wrong but a £60000 earner pays an extra £1341. The £20000 earner's tax burden has increased by 10%, the £60000 earner's tax burden has increased by about 9%. This disparity increases the more you earn. At £150000 your tax burden goes up by only 5.64%, at £500000 it goes up by 4.73%.

But it really is as simple as 20% to 22% being a bigger change than 40% to 42%.

Holyrood is no different to Westminster, thats the view many of us hold. The longer the SNP are in power the more people will realise that, so for that reason I say long may they continue in government there.

Holyrood has PR, and no House of Lords. As a system, it's far better. The current SNP dominance is a blip, that won't be the normal state of affairs after independence. Loads of people - me included - are not naturally SNP supporters, they're a means to an end.

Your numbers are wrong

On the "relative" impact I can see @Northwinds point but you to look at both that and absolute amounts paid. Also total tax burden where partocularly in the UK where there is no vat on food the wealthier pay a lot more tax on an absolite amd percentage basis.

IMO we all pay insufficient tax to have the services we'd like. However as its been shown repeatedly people won't vote for tax rises to pay for them. The Labour policy is to say someone else (tax payers or companies) will pay not their core voters,

Hah, you're right actually, just doublechecked that and I'd applied 44% for the revised higher rate not 42%

Ironically my argument's actually stronger with this correction, so thanks! £988 is a 7.37% increase in tax paid, where I'd calculated it as 9%.

Yes, and a 2.36% reduction in take home pay (for £60k) is more than a 1.13% reduction in take home pay (for £20k). Percentages can be used to suit any argument. Explain how you think it's unfair on the lower paid that a 2% increase in income tax across the board means that the higher paid endure more than double the percentage reduction in their take home pay?

Northwind, you're still ignoring the personal allowance I think, although don't have a calculator handy:

http://chokkablog.blogspot.co.uk/2015/12/swinney-confused-or-aiming-to-confuse.html

Ben, no second chamber is a good thing? Most countries have one.

A second chamber is debatably a good idea (though often as a control on a FPTP system) - that doesn't mean the HoL is a good idea.

airtragic - Member

Northwind, you're still ignoring the personal allowance I think

Nope, it's in there in both mine and Ox's calculations.

The Flying Ox - Member

Explain how you think it's unfair on the lower paid that a 2% increase in income tax across the board means that the higher paid endure more than double the percentage reduction in their take home pay?

For the same reasons that we have tax banding in the first place; the higher earner is more able to pay and is less impacted by increases. The only reason his income "endures" a greater reduction is that it's greater in the first place.

But it's also subject to an even greater tax rate. I'm almost convinced that you're deliberately missing the point, seeing as pretty much everything else I read from you on this forum is measured and sensible.

Northwind - Member

airtragic - Member

Northwind, you're still ignoring the personal allowance I think

Nope, it's in there in both mine and Ox's calculations.

Well in that case, I make a 2% tax rise for your 20k earner 2% of 20k-£10600=£188 on top of their existing £1880, a 10% tax rise but only a 1.03% drop in their disposable, which is the important bit, ignoring NI.
The 40k earner has 2% more on £29400, so still 10% more tax, but a 1.72% drop in their disposable. The 60k earner has 2% more on the 20% band (an extra £635) and 2% more on the 40% band (an extra £364) so they're taking a 2.75% hit on their disposable. Looks quite progressive to me?

OK, I wonder if I can explain it differently. What we're talking about here is the tax varying powers- not UK tax policy on the whole but the narrow ability that Scotland has to vary income tax

And here, the tax varying powers are, mathematically, disproportionate- that's just a statement of fact, 2% extra on 20% is a greater change than 2% extra on 40%. There's no way for the current scottish government tax raising powers to be used that doesn't increase lower tax bands proportionally more than higher tax bands, and raise the amount of tax paid by lower rate tax payers proportionally more than higher rates, it's mathematically impossible.

Your objection seems to be against the UK's progressive tax system, rather than the scottish tax-raising powers- and the basic concept that higher earners should pay more.

And this is where we part, I think, because to me it's just obviously the case that someone earning £60000 is more able to deal with a reduction in their take-home than someone earning £20000. It's fair to ask a strong person to carry a heavier load and it's fair to ask a high earner to pay more tax, simply because taking £1000 in tax from someone who earns £60000 has a smaller impact on them than taking £200 in tax from someone who earns £20000.

For what it's worth, the scottish government's tax altering powers don't allow them to change any of this, even if they wanted to. If you want flat tax, take it up with westminster but it's a bit of a hard sell.

airtragic - Member

only a 1.03% drop in their disposable, which is the important bit

Why is that the important bit? A 1% drop in the disposable income of a £20000 earner has a greater impact on them than a 2.75% drop in the disposable income of a £60000 earner. It's not a simple numerical comparison because the disposable incomes themselves aren't comparable.

But you were arguing for using % rather than absolute figures before. I don't object to the progressive tax system per se, and I agree that higher earners should pay more, but I think the important thing is the size of the take to the Treasury, rather than the principles. I think that squeezing high earners more risks more capital flight/aggressive avoidance, particularly if you have a lower-taxing neighbour as Scotland does or iScotland would, reducing that take to the Treasury. The take-home is the important bit because that's what you've got to spend after tax and therefore, how well-off you feel.
Incidentally, I don't consider £60k to be some kind of rock-star wage. It's nowhere near the point where you wouldn't have to budget and think about money. So I don't think it's a safe assumption that the 60k earner will have a spare grand to splash around more than the £20k earner can afford £200.

So this Tartan austerity, do it mean that kilts have no pattern from now on? Does it mean they are getting shorter them man skirts?

[i] I think that squeezing high earners more risks more capital flight/aggressive avoidance[/i]

Yep. A bit like with small owner-managed businesses where you'd rather spend the money on something better than let the taxman have more.

pah, I thought this thread was going to be about Wee Eck's trousers 😀

airtragic - Member

But you were arguing for using % rather than absolute figures before.

I was using percentages to show the proportional change in tax paid as a result of the percentage change in rates, yes. I can't see any better way to do that. The entire point I'm making is about the impact and limitations of the current tax powers. Mostly what seems to be coming back is arguments about the progressiveness of the national tax policies, which seems to miss the point.

I think it's helpful to think about [i]why[/i] the powers are limited in this way. What productive reason could there be? As I've mentioned, it's not a limitation Westminster would accept, or as far as I know one you find in use in any other progressive tax system in the world. It's just a weird artificial restriction that only limits the usefulness of the powers. I've never seen any attempt to argue that it wasn't added for political reasons. And it seems very much to me that the point I'm arguing is exactly the same point they were making when they wrote the Act

airtragic - Member

The take-home is the important bit because that's what you've got to spend after tax and therefore, how well-off you feel.

I wouldn't dispute that; the part I dispute is the usefulness of comparing percentage changes for people whose take-home is wildly different, and where different proportions of spending go on basic necessities vs luxuries etc.

I wouldn't dispute that; the part I dispute is the usefulness of comparing percentage changes for people whose take-home is wildly different, and where different proportions of spending go on basic necessities vs luxuries etc.

I used to earn somewhere in the region of £10k, deciding if people deserved to be let into the country or not. I lived in a 2-up/2-down terraced house share, didn't have a car, didn't have a mobile phone, didn't have internet, etc. I paid my way through university with basic bar/kitchen jobs and subsequently used my education and experience to work my way through the ranks, and I now own a house in a nice bit of the world and can afford a mobile phone, a car, an internet connection, etc. My mortgage payment alone is 4x what my rent was in the early days (and that's more indicative of how cheap my rent was, rather than how expensive my mortgage is). The difference is that I invested in my future and now earn enough for that to be a reasonable outgoing.

Do you think these things come for free? Do you think that those who earn more should forego these things and instead give every extra penny they earn over what you earn to the government? The fact remains, you claim that the powers available to the Scottish Government are un-useable on the grounds of penalising lower earners, when in fact they are demonstrably less fair to people whose earnings fall into the higher tax bracket. I'm talking "take home pay" here, not some woolly percentages that can be interpreted one way or another.

I think it's helpful to think about why the powers are limited in this way. What productive reason could there be? As I've mentioned, it's not a limitation Westminster would accept, or as far as I know one you find in use in any other progressive tax system in the world. It's just a weird artificial restriction that only limits the usefulness of the powers. I've never seen any attempt to argue that it wasn't added for political reasons. And it seems very much to me that the point I'm arguing is exactly the same point they were making when they wrote the Act

No doubt there was a bit of politicking around SRIT, although the desire t avoid too big a skewing of tax rates within one country may also have been a factor. Do you think there's any politicking around the SNP's decision not to use the powers, despite their demonstrable progressiveness, and just stir up some more grievance against big bad Westminster, in line with the ultimate goal of separation? Had you gone independent/FFA, it seems likely that the SNP would be implementing rather more austerity than Westminster are. The Westminster govt isn't the only one that takes cynical politically motivated decisions.

Someone else has done the sums/graphs:

http://chokkablog.blogspot.co.uk/2015/12/srit-blunt-but-undeniably-progressive.html

The fact remains, you claim that the powers available to the Scottish Government are un-useable on the grounds of penalising lower earners, when in fact they are demonstrably less fair to people whose earnings fall into the higher tax bracket.

So someone earning £20k is so close to the poverty line that losing £4/week means they go hungry? Get a grip.

So someone earning £20k is so close to the poverty line that losing £4/week means they go hungry? Get a grip.

That missing £16 a month may not sound a lot but when you don't have a lot to start with it could easily put someone into a situation where bank charges are applied. That £16 can turn into £50 in the space of a month and then they are in real trouble the following month.