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SLG
Born Again..........and still Scottish!
Joined: 16 Sep 2005
Posts: 5515
Location: Dùn Eideann
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 Posted: Fri Nov 25, 2005 12:50 pm Post subject: Local income tax |
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I think most people recognise the need to reform the system of council tax. In the parliament we have the SNP, SSP, Greens and Libdems supporting an individual income based tax. The difference with the SSP seems to be that they want to see this carried out on a national basis, with the money collected and spend locally, while the others want it to be left in the hands of the councils to set rates, though still based on the ability to pay. Have I got this right? If so can someone from the SSP here explain why this should be taken out of the hands of the councils, is this not just a further reduction in the power of our local authorities?
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Rinty
Ready For Afterlife!
Joined: 19 Sep 2005
Posts: 2538
Location: SW Scotland
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| Posted: Tue Nov 29, 2005 11:15 am Post subject: ssp |
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The SSPs Scottish Service Tax does not mean less control of budgets for councils, simply a more efficient and fairer way of collecting it.
I'm looking forward to Tommys bill coming up in December. It should represent the end of our unfair "son of poll tax", with the Lib Dems, SNP Greens and independents unanimously committed to axing the council tax it only takes two or three labour rebels or tory abstentions and parliament can then get down to working out the best replacement.
George Lyons has been in the papers slating the SSPs Scottish Service Tax, but that is no reason not to support the part of the bill that agrees that the council tax is unfair and should be scrapped. He could then add an amendment advocating the Lib Dems local income tax. From George Lyons stance it might seem that the Lib Dems will not back the bill with amendments but I am still quietly confident that even the slippery Lib Dems could not justify missing the chance of voting for a manifesto pledge when given the chance.
Some have suggested that the SNP don't intend to support the bill with an SNP amendment, can any SNP member clarify this?
If all the parties who claim to be against the council tax work together on this we coould see a bill passsed in parliament that establishes the principle that the council tax will be abolished in Scotland and replaced by a method based on ability to pay. |
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azzuri
'Our Scotland' Fossil
Joined: 12 Sep 2005
Posts: 3776
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| Posted: Tue Nov 29, 2005 12:17 pm Post subject: |
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any idea how this would actually work?
would it be say, 1% of your annual salary monthly?
_________________
"Every single person on this planet is unique. Just like everyone else..." - Random Guy in Edinburgh Pub
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SLG
Born Again..........and still Scottish!
Joined: 16 Sep 2005
Posts: 5515
Location: Dùn Eideann
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| Posted: Tue Nov 29, 2005 12:40 pm Post subject: Re: ssp |
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| Rinty wrote: | | The SSPs Scottish Service Tax does not mean less control of budgets for councils, simply a more efficient and fairer way of collecting it. |
Do you not think that centralising rates accross all councils does remove power? Why should Glasgow council not be able to set their rates (based on income) to a different level than Highland council?
| Rinty wrote: | | Some have suggested that the SNP don't intend to support the bill with an SNP amendment, can any SNP member clarify this? |
Cheers for the info - I was unaware of the detail of Tommy's bill. The SNP would have to support a bill calling for the council tax system to be scrapped. I've not heard any mention of this recently in SNP circles, but I'll be very surprised if any SNP MSP can justify not backing this. |
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Rinty
Ready For Afterlife!
Joined: 19 Sep 2005
Posts: 2538
Location: SW Scotland
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| Posted: Wed Nov 30, 2005 8:57 am Post subject: r |
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| Quote: | | Do you not think that centralising rates accross all councils does remove power? Why should Glasgow council not be able to set their rates (based on income) to a different level than Highland council? |
Business rates are not covered in Council tax at the moment or Tommys bill. The Council tax only accounts for a small part of a councils spendable budget, the vast majority of their budget is from central taxation.
As it currently exists we already have huge anomalies anyway. People work and use services in one council area while paying council tax in another.
The Service tax simply puts the principle that the amount of tax payed should be based on income rather than where you live. It makes the case for this being the simplest and fairest way of spreading the collective responsibilities and put forward the case for collecting tax in a simpler way through paypackets and tax returns.
You can read more details here
Or I've pasted the relevant part of SSP 2003 manifesto below.
1. Abolish the Council Tax in favour of a new Scottish Service Tax based on income
Under the Scotland Act, the fiscal powers of the Scottish Parliament are severely restricted. Holyrood is forbidden to vary top rate taxation, Corporation Tax, or VAT.
But it does have control over council finance, including the power to switch to a new system of local taxation.
The Council Tax was concocted by Michael Heseltine and John Major as a fallback when the Poll Tax collapsed. It was and remains a blatantly unfair Tory tax, which protects the wealthy while punishing low paid workers and their families. The differential last year between the top earner in Scotland, Sir Ian Woods, and the average hospital ancillary worker was 20,000 to one. Yet the maximum differential in Council Tax bills is just three to one.
A family living in a tiny high rise flat worth £30,000 will pay around 25 per cent of the value of their home in council tax over ten years. Over the same period, a family living in a £2 million luxury mansion will just pay 1 per cent of their income in Council Tax.
Under our Scottish Service Tax plan, household bills would be scrapped entirely in favour of individual bills based on income. The new local tax would be set at a uniform rate across Scotland, with the revenues allocated to councils on the basis of need.
Benefits
Over 77 per cent of Scottish homes would be better off. Many low income households would stand to save £20-£25 a week from the change.
At the other end of the scale, the wealthiest 16 per cent of households would pay more. Many of these households have benefited from a cash windfall totalling tens of thousands per household since the abolition of the old rates system The bill for that windfall was picked up mainly by low income households.
There are a small number of households - around 7 per cent - who would neither gain nor lose from the Scottish Service Tax.
The Scottish Service Tax would be collected by Inland Revenue using the already existing machinery for income tax collection. In contrast to the Council Tax minefield, it would be simple, efficient and inexpensive to administer and collect.
Under the new plan, business rates would be set and retained locally by councils. All council authority finance workers would be guaranteed continued employment, though some may be redeployed in welfare rights programmes to assist senior citizens and others on low income to claim and receive benefits to which they are entitled.
The Scottish Service Tax will work as follows:
All individual income below £10,000 (£200 a week) would be exempt from the Scottish Service Tax. Only income above £10,000 would be liable for tax.
Income between £10,000 and £30,000 would be taxed at a rate of 4.5 per cent. This means that a worker earning £20,000 would pay £450 (Nil on the first £10,000; plus 4.5 per cent on the next £10,000).
Income between £30,000 and £50, 000 would be taxed at a rate of 15 per cent. Income between £50,000 and £90,000 would be taxed at a rate of 18 per cent. Income over £90,000 would be taxed at a rate of 20 per cent.
Individuals will be eligible to apply for 'exceptional earnings consideration'.This would specifically apply to those whose earnings are irregular.
For example, there are members of Scotland's artistic community who earn little or nothing for two or three years, then receive a block payment equivalent to several years salary.
In these instances, provision will be made to calculate average earnings over a four year period and adjust the Council Tax bill accordingly.
Cost of replacing the Council Tax with the Scottish Service Tax:
The introduction of a Scottish Service Tax based on the figures we have proposed would generate extra revenue rather than cost money.
Based on figures from 1999-2000, there would be an overall surplus of £280 million as a direct result of replacing the Council Tax with a Scottish Service Tax.
This figure would include £276 million savings in council tax benefits which the Benefits Agency would no longer require to pay.
However, even if Westminster refused to return that cash in full to Scotland, under the Barnett formula Scotland would still be entitled to receive 8 per cent or £22 million - bringing a net gain to the Scottish budget of £26 million. Moreover, because the Service Tax would be more efficiently collected at source by Inland Revenue, there would be further estimated savings of up to £133 million a year, providing a potential net surplus of around £160 million. This would ensure ample resources to protect all local council jobs and improve services.
| Quote: | | but I'll be very surprised if any SNP MSP can justify not backing this. |
After the vote that banned the 4MSPs in September, and the shocking sanction of withdrawing the wages of those who work for the 4MSPs, I think the SNP are perfectly capable of voting against the SSP bill simply to stop the SSP from having a succesful bill. It has happened before. |
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SLG
Born Again..........and still Scottish!
Joined: 16 Sep 2005
Posts: 5515
Location: Dùn Eideann
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| Posted: Wed Nov 30, 2005 4:01 pm Post subject: |
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Rinty, again, thanks for the info. I remember now about the business rates. While I would prefer to see the councils also have control over the rate of the local income tax as well as much more control of their income and spending I understand why the SSP would go down this route. The most important issue is replacing the present system of council tax with a fairer system.
As for your point about not trusting the SNP. I despise the sectarian nature of our politics. I see it as being a direct follow on from the Westminster style politics and think it will take a long time to get beyond. I did think the punishment of those SSP MSP's was harsh. I also think that if events hadn't progressed so quickly, the SNP members would have recognised this and not supported it. However, I would still blame those SSP members, and then maybe George Reid before I would blame the SNP MSPs for the end result.
I hope the Independence Convention will lead to much more dialog between the SNP, SSP and Greens. And I hope after Independence, the severing of ties between all the presently Unionist parties and their London masters will go some way to helping us progress to a new political paradigm. |
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wallacesclaymore
No Longer a Wean
Joined: 21 Oct 2005
Posts: 94
Location: Edinburgh
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| Posted: Fri Dec 02, 2005 1:27 pm Post subject: |
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Based on the example given, and the calculations/formulae/percentages and bandings, this would certainly benefit many people I know.
These are regular, workers who are not the poorest in society but certainly NOT the highest....therefore, if (as the figures suggest) 77% of homes would indeed be better off, I think this one should get ALL our support (with further refinement and tweaking i.e. the overall budgetary controls etc).
But, the principle behind the idea, the rates and the calculations seem to indicate a winner to me. This is where I often loose sight of political alligence...and its a pity politicians couldnt do the same.
If we had a paper full of ideas and policies, credited to NOBODY, the support for particular bills would be entirely fair and unbiased rather than saying "That was dreamed up by Tam and his guys...lets pan it". I support Independece, I support the SNP but on this one, I reckon the SSP have a good bill.
Just my opinion mind...on the face of it, seems fair enough. I guess the biggest objections would be from teh highest earners... 
WC.
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