Monday, 14 December 2015

Tax Stupid

Westminster's system of taxation is byzantine. Its complexity allows Facebook, Starbucks, Google (yes, the host of this blog...) and others to dance around the system, paying next to nothing whilst taking profits from all of us.

The system appears even stranger when it comes to Scotland.

This week, John Swinney will publish his budget for next year. This should be an opportunity to tackle poverty in Scotland - to find new and better ways to help people in need. The, excuse me, bleedingly obvious thing to do is to vary tax rates such that people on higher incomes or with greater accumulated wealth put a wee bit more into the communal pot to help out those with less. Simple redistributive taxation.

But Mr Swinney can't do that. Thanks to the recommendations of the Calman Commission (2009), converted into law by the Scotland Act 2012, our Scottish Government has to change all the rates of tax if it wants to change one. These devilish details are in the small print, the stuff that most folk find too boring to read, but in essence they mean that if Mr Swinney wants to add a penny to the tax paid by someone on a high income...he also has to add a penny on the tax paid by everyone on a low income. You can find out why this does not work here and here.

So under the current rules, Scotland can do almost nothing to tackle the blight of poverty. Westminster has, yes, given us powers to change income tax, but it has bound us up like a turkey for Christmas in rules which make those powers meaningless. Rules hidden in the detail that voters will not read - so that Osbameron can continue to crow that "Scotland has the power to alter taxation" even if what he means is "We've stuffed the Scottish turkeys again. Hurrah."

When will Westminster stop treating us like children?

No comments:

Post a Comment