Local Income Tax

[jamboj]

Firstly, I dont want this thread to turn into a political point scoring effort, so please dont start.

 

Can anyone explain the maths behind this? Everything I have read says that a local income tax (which by law can only be 3p in the ?) will not raise anywhere near the same amount as council tax does..

 

Where is the shortfall going to be made?

[N User]

From rich people.

 

The basis behind it is that people earning less will pay less whilst people earning more will pay more.

 

It'll benefit (for example) a family with two low incomes. As their saving could be quite a bit.

[rossmaroon]

The problem for the Scottish Government is that Westminster has said we would lose ?400m in Council Tax Relief, meaning that sum haa also to be made up.

Personally, my wife and I would pay a lot more than through the Council Tax, which is already very expensive. While I don't mind paying my bit, it seems a bit unfair paying through the nose for other people's kids schooling and for the police to take care of same delinquents misbehaviour.

That said, I have faith in the SNP to deliver improvement overall.

[Tane]

Does anybody know any real figures on how much more tax you'd pay from your monthly wage? I use the following site which is an extremely accurate tax calculator: http://www.listentotaxman.com.

 

As a current example, a single person, under 65, no student loan etc. on ?20,000 per year will take ?1666.66 gross and ?1290.63 after tax and national insurance has been deducted per month.

 

Any idea what that figure would be if the local income tax came in?

[A Boy Named Crow]

The shortfall only exists if you believe the Labour lie that they are going to withhold ?400 million due to Scotland. One by one the supporters for this theft are dropping away, it would be political suicide for a Westminster government to pull such a stunt. Bottom line is that income tax is the fairest way of taxing the population. Some people will be better off, others worse off, but it will be fairer.

[upthehill]

I'd be there alongside Tom Hunter, Brian Souter, Michelle Mone, Tom Farmer in paying... No local tax, despite being able to afford to, so the answer that the rich will make up the shortfall doesn't mean anyone with their own business even if they are extremely well off like the guys I mentioned.

 

That's why a property based tax works. Rich guys = massive houses = highest local tax = fairer all round.

[Therapist]

The problem for the Scottish Government is that Westminster has said we would lose ?400m in Council Tax Relief, meaning that sum haa also to be made up.

 

Correct.

 

Fat Alex - as usual - is all bluster and snideyness. He made the promise to introduce it in his election manifesto without properly understanding or assessing the fiscal, political or legal ramifications.

 

He knows local income tax won't go through, but he has to push ahead with it. When it's knocked back by the Scottish Parliament or Westminster he will simply blame them.

[The Mighty Thor]

Correct.

 

Fat Alex - as usual - is all bluster and snideyness. He made the promise to introduce it in his election manifesto without properly understanding or assessing the fiscal, political or legal ramifications.

 

He knows local income tax won't go through, but he has to push ahead with it. When it's knocked back by the Scottish Parliament or Westminster he will simply blame them.

How would that disappoint you if it doesn't go through? Personally I don't think its the brightest thing I've ever heard of but if. Its stopped by due political process then that's what its there for.

[systemx]

The big lie is that it is a LOCAL tax as administered in other countries.This is a NATIONAL tax applied centrally.

[Das Root]

I'd be there alongside Tom Hunter, Brian Souter, Michelle Mone, Tom Farmer in paying... No local tax, despite being able to afford to, so the answer that the rich will make up the shortfall doesn't mean anyone with their own business even if they are extremely well off like the guys I mentioned.

 

That's why a property based tax works. Rich guys = massive houses = highest local tax = fairer all round.

 

 

Not sure how you work that? Bands only go so high and the folk in their castles and estates are far less in number than those in the one and two bedroom flats, and depending on the area in which those castles and estates lie they could pay far less than somebody living in a better part of a big city, but in a far smaller and

less costly house / flat.

 

Local income tax is far fairer, those who live in the Ivory (Therapist) Towers will pay a share better equivalent to their posh pad, while those in a nice wee house round the corner (such as Therapist's man servant) will pay something more suitable to what they can afford, even though they're only round the corner and in a higher band compared to a similar sized flat in a less leafy area.

 

Westminster are saying 'no deal' on the rebate "because it's not council tax now is it?", but that's utter bollox as the money will go to the council will it not? Of course. So just semantics from Gordon "Yellow" Brown.

 

The Lib Dems will be the key, they want to scrap the council tax too, they want to introduce a LIT, but they want it set locally, and not the 3% central tax that the SNP want.

[Deodato]

There's some misunderstanding on this thread, which is understandable.

 

I know a lot about this, so should pick my words carefully.

 

Firstly, CT Benefit - that's complicated due to (i) very few of those entitled ever took it up and (ii) you can equalise the local income tax so you dont need the benefit. Treat it as a transfer payment, that never really worked. Hence, a local income tax, with the right adjustments, might work relativley better.

 

Secondly, the real figure is open to discretion, but you can model it fairly well. Note, how is the tax levied - with a ceiling (3p in the pound) or without (% of all earnings at the higher rate). From memory, and its been a while, a sizeable chunk of the population would pay ?700 instead of ?1,000 - forgive the round numbers, but that should relate to CT bills.

 

One of the problems that Labour will throw up is that it will become overly complicated as it has to run along side the council tax. Thats bull. The goal of a local income tax is to replace the council tax - hence no duplication or parallel tax problems. Watch out for that in days to come.

 

On the whole, its workable and fairer. There's anomolies galore, (what about Berwick upon Tweed as a place to work, and Eyemouth as a place to live) but are those anomolies any worse than that of the council tax? What's the cost of 40,000 middle class students in terms of resources to Edinburgh City Council - (bins, security, etc) and what do they pay - zilch. Discuss.

 

Hope this helps.

 

Deodato

[The Doctor]

I'd be there alongside Tom Hunter, Brian Souter, Michelle Mone, Tom Farmer in paying... No local tax, despite being able to afford to, so the answer that the rich will make up the shortfall doesn't mean anyone with their own business even if they are extremely well off like the guys I mentioned.

That's why a property based tax works. Rich guys = massive houses = highest local tax = fairer all round.

 

That's the first post I've ever read of yours where something just doesn't remotely ring true!

 

The size of your house, or even the value of your house, is no way to decide how wealthy you are. It's certainly not as fair as basing tax on your income.

 

The only fair way to tax people is to base it on what they earn.

 

I used to think that everyone should pay the same for the services they get. On the surface that makes sense, I'm not means tested when I buy a loaf of bread, but paying tax isn't just about paying for services, it's about contributing to society.

 

I'd welcome a local income tax, I'd very likely be better off too!

[Drew Busby !]

There's some misunderstanding on this thread, which is understandable.

 

I know a lot about this, so should pick my words carefully.

 

Firstly, CT Benefit - that's complicated due to (i) very few of those entitled ever took it up and (ii) you can equalise the local income tax so you dont need the benefit. Treat it as a transfer payment, that never really worked. Hence, a local income tax, with the right adjustments, might work relativley better.

 

Secondly, the real figure is open to discretion, but you can model it fairly well. Note, how is the tax levied - with a ceiling (3p in the pound) or without (% of all earnings at the higher rate). From memory, and its been a while, a sizeable chunk of the population would pay ?700 instead of ?1,000 - forgive the round numbers, but that should relate to CT bills.

 

One of the problems that Labour will throw up is that it will become overly complicated as it has to run along side the council tax. Thats bull. The goal of a local income tax is to replace the council tax - hence no duplication or parallel tax problems. Watch out for that in days to come.

 

On the whole, its workable and fairer. There's anomolies galore, (what about Berwick upon Tweed as a place to work, and Eyemouth as a place to live) but are those anomolies any worse than that of the council tax? What's the cost of 40,000 middle class students in terms of resources to Edinburgh City Council - (bins, security, etc) and what do they pay - zilch. Discuss.

 

Hope this helps.

 

Deodato

 

Spot on.

 

Tax should be progressive and equitable. LIT is more progressive and more equitable than the current arrangement.

 

Simple.

[Geoff Kilpatrick]

I disagree. There are taxes on the other factors of production (income tax for labour, corporation tax for capital etc) but the only tax for land, bar environmental taxes, is stamp duty. A land value tax should be used, IMO, for local taxation in the UK. This would help stop some of the property bubbles (cue a certain poster at the mere mention of property bubbles) as well.

 

However, it doesn't bother me now so good luck fighting about it!

[southlondonjambo]

http://www.telegraph.co.uk/news/newstopics/politics/scotland/2673729/End-of-council-tax-in-Scotland-to-widen-divide-with-England.html

 

More huge tax cuts for freeloading Scotland all funded by England.

 

Time to boot out the selfish, scrounging Scots for good. They whinge and whine endlessly about 'oor oil' and 'freedom', but when it comes down to it they don't have the guts to vote for independence as they're happy to live the high life on a list of benefits as long as your arm, all paid for in full by the English taxpayer....

 

But then they've been leeching off England for the past 300 years, so nothing changes, with more goodies being dished out just this week by Salmond and Brown's anti-English pact.

[Sergio Garcia]

http://www.telegraph.co.uk/news/newstopics/politics/scotland/2673729/End-of-council-tax-in-Scotland-to-widen-divide-with-England.html

 

More huge tax cuts for freeloading Scotland all funded by England.

 

Time to boot out the selfish, scrounging Scots for good. They whinge and whine endlessly about 'oor oil' and 'freedom', but when it comes down to it they don't have the guts to vote for independence as they're happy to live the high life on a list of benefits as long as your arm, all paid for in full by the English taxpayer....

 

But then they've been leeching off England for the past 300 years, so nothing changes, with more goodies being dished out just this week by Salmond and Brown's anti-English pact.

 

Can you just get to France please, everyone is contributing to the thread and all you seem to do in every thread i have read is moan about the "leeching scots" blah blah blah!!!!

 

You my english friend really rip my knitting!

[The Vulture]

http://www.telegraph.co.uk/news/newstopics/politics/scotland/2673729/End-of-council-tax-in-Scotland-to-widen-divide-with-England.html

 

More huge tax cuts for freeloading Scotland all funded by England.

 

Time to boot out the selfish, scrounging Scots for good. They whinge and whine endlessly about 'oor oil' and 'freedom', but when it comes down to it they don't have the guts to vote for independence as they're happy to live the high life on a list of benefits as long as your arm, all paid for in full by the English taxpayer....

 

But then they've been leeching off England for the past 300 years, so nothing changes, with more goodies being dished out just this week by Salmond and Brown's anti-English pact.

 

Oh it's in the Daily Telegraph it must be true. All Scots are scroungers aren't they ! All English people born and bred are good hard working folk who never scrounge or take any hand outs at all do they. Blah blah blah blah

 

England has of course achieved everything on their own. They would have won the Battle of Britain without the aid of the Polish fighter pilots, defeated Germany & other enemies in World War I & 2 without the help of Commonwealth forces, resistance fighters and other allies.

 

Typical southerner you are, London is best blah blah. Suppose it was the fault of Scotland that the new Wembley was over budget and not even built on time ?

 

Have you ever posted anything on Hearts or do you just come here to pass the time of day ?

 

Do you know where Hell is ?

 

I forgot how great England was. When I lived there, I saw plenty of scroungers. How things must have changed in 2.5 years in my absence....

[upthehill]

25 reasons why Alex should drop local income tax

 

 

Alex Salmond sets out the Scottish Government's programme for the year at the Scottish Parliament today. Picture: PA

Alex Salmond sets out the Scottish Government's programme for the year at the Scottish Parliament today. Picture: PA

Alex Salmond sets out the Scottish Government's programme for the year at the Scottish Parliament today. Picture: PA

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1

Local income tax (LIT) will leave a ?750 million financial black hole in Scotland. Others have suggested it could be as high as ?1.3 billion.

 

YVETTE COOPER, CHIEF SECRETARY TO THE TREASURY

 

2

 

LIT will make Scotland the highest-taxed part of the UK and this might encourage businesses to leave.

 

INSTITUTE OF DIRECTORS

 

3

 

There will be serious service cuts at council level unless local income tax is set at 4.5p or higher.

 

THE LABOUR PARTY

 

4

 

LIT may be illegal under the provisions of the Scotland Act because it is unclear whether a local tax can be replaced by a national tax.

 

PROFESSOR RICHARD KERLEY, OF QUEEN MARGARET UNIVERSITY

 

5

 

Replacing an unfair tax with an unworkable tax will cause more misery than we can know.

 

PATRICK HARVIE, GREEN PARTY

 

6

 

There will be a 'damaging' impact on service personnel, who would have to pay the new tax in full, but currently have their council tax reduced. This could lower morale and cause yet more recruitment problems.

 

BOB AINSWORTH, ARMED FORCES MINISTER

 

7

 

There will be serious anomalies over people living in England but working in Scotland. There are also concerns that people may register as living in England to avoid paying.

 

THE INSTITUTE OF CHARTERED ACCOUNTANTS

 

8

 

Hard-pressed students, who are currently exempt from the council tax, would have to pay.

 

THE NATIONAL UNION OF STUDENTS

 

9

 

Scottish firms would be placed at a competitive disadvantage to companies in other parts of the UK because LIT additions to wage packets would be passed on to customers.

 

SCOTTISH CHAMBERS OF COMMERCE

 

10

 

LIT will take ?70 million from vital city council services which will lead to severe cuts.

 

GLASGOW CITY COUNCIL

 

11

 

The PAYE system does not easily deal with taxpayers who receive income from different sources, including pensioners receiving pensions from different employers or those who have various part-time jobs ? this will particularly affect those on low incomes who will be exposed to incorrect PAYE codes, and these practical issues should not be underestimated.

 

THE LAW SOCIETY OF SCOTLAND

 

12

 

Regardless of the rate of tax chosen, there will be uncertainty as to the yield that can be obtained, as revenues derived from income taxes can be more volatile.

 

SCOTTISH COUNCIL FOR DEVELOPMENT AND INDUSTRY

 

13

 

LIT would be technically complex and challenging to implement because of the complexities of tax law, and trying to sort out what would happen to the ?400 million council tax benefit.

 

THE CHARTERED INSTITUTE OF PUBLIC FINANCE AND ACCOUNTANCY

 

14

 

Investors and businesses who are thinking of coming to Scotland will be scared away because of the extra income tax.

 

CBI SCOTLAND

 

15

 

LIT probably breaks European law by removing control of raising local finances from councils. It could break Article 9 of the European charter of local self-government, which guarantees the right of councils to raise a large part of their own finances.

 

PROFESSOR CHRIS HIMSWORTH, OF EDINBURGH UNIVERSITY

 

16

 

Wealthy people who have unearned income from sources like share dividends can avoid LIT whilst poorer people would have to pay.

 

THE SCOTTISH TRADES UNION CONGRESS

 

17

 

The UK tax system does not give across-the-board allowances for disability and, in the absence of such allowances, the burden of LIT will be higher on disabled people than on the general body of taxpayers.

 

LOW INCOMES TAX REFORM GROUP

 

18

 

LIT will be more intrusive into people's lives because it would require far greater knowledge of their personal circumstances than a property tax would.

 

THE INSTITUTE OF REVENUES, RATING AND VALUATION

 

19

 

At present, a cohort of carers are currently "disregarded" (treated as not living in the property) when calculating council tax. Households with multiple taxpayers will end up paying more and this has the potential to include more carers who are not currently liable for council tax.

 

CARERS SCOTLAND

 

20

 

The ?281 million of savings that need to be made to create a 3p local income tax could be used instead to reduce the burden of the council tax.

 

THE CONSERVATIVE PARTY

 

21

 

LIT would bring unwelcome extra bureaucracy and cost to businesses because of all the extra paperwork created in sorting out employees' income tax. Lib Dem proposals for different rates for different areas would make it even worse.

 

THE FEDERATION OF SMALL BUSINESSES

 

22

 

Families will be worse off, or there will be cuts in public services, because the 3p rate will not be enough to fund current service levels.

 

UNISON

 

23

 

Water and sewerage charges are collected by local authorities on behalf of Scottish Water ? the consultation did not present any proposals on how such charges will be set and collected under LIT.

 

SOCIETY OF LOCAL AUTHORITY CHIEF EXECUTIVES

 

24

 

LIT would be bad for the environment because it will take away the flexibility needed to bring in specific charges for rubbish collection.

 

THE POLICY INSTITUTE

 

25

 

The SNP's centralising LIT proposal reduces the lack of control that councils have over local finances.

 

SOUTH LANARKSHIRE COUNCIL

[upthehill]

 

Local income tax is far fairer, those who live in the Ivory (Therapist) Towers will pay a share better equivalent to their posh pad, while those in a nice wee house round the corner (such as Therapist's man servant) will pay something more suitable to what they can afford, even though they're only round the corner and in a higher band compared to a similar sized flat in a less leafy area.

 

 

Ah, but those in the Ivory (Therapist) Towers will not pay income tax, they'll pay different taxes.

 

"Wealthy people who have unearned income from sources like share dividends can avoid LIT whilst poorer people would have to pay.

 

THE SCOTTISH TRADES UNION CONGRESS"

 

Not just wealthy people but middle sized businessmen aswell, like myself.

 

Meanwhile Therapist's man servant will pay the tax, depite not earning anything like what Therapist does. So the poor contribute more than the well off!

[Big D]

And yet 86% of the Scotish population agreed that an income based tax is preferable. no survey is wholley accurate but even factoring in a standard deviation this is a huge majority; and of course must include people who would pay more. I think in a democracy it is preferable to listen to the majority of the population and act on their behalf, than to pander to vested interests who may be less well off with that outcome. I of course include the political parties you quote in your 25, as vested interests. And without going through the whole list, would ask for example, why the institute of directors are not railing against fuel taxes, which are major contributers to Scotland already being amongst the highest taxed areas in the U.K.

[upthehill]

And yet 86% of the Scotish population agreed that an income based tax is preferable. no survey is wholley accurate but even factoring in a standard deviation this is a huge majority; and of course must include people who would pay more. I think in a democracy it is preferable to listen to the majority of the population and act on their behalf, than to pander to vested interests who may be less well off with that outcome. I of course include the political parties you quote in your 25, as vested interests. And without going through the whole list, would ask for example, why the institute of directors are not railing against fuel taxes, which are major contributers to Scotland already being amongst the highest taxed areas in the U.K.

 

Sure there are vested interests on the list, but when you look at the different sorts of vested interests it becomes quite compelling - unions & big business organisations, students & soldiers, Labour & Tories, carers & treasury chiefs, chief executives of local authorities & environmentalists. The list has a lot of strange bedfellows, all lining up to publicly ridicule the proposed tax

[Das Root]

Ah, but those in the Ivory (Therapist) Towers will not pay income tax, they'll pay different taxes.

 

"Wealthy people who have unearned income from sources like share dividends can avoid LIT whilst poorer people would have to pay.

 

THE SCOTTISH TRADES UNION CONGRESS"

 

Not just wealthy people but middle sized businessmen aswell, like myself.

 

Meanwhile Therapist's man servant will pay the tax, depite not earning anything like what Therapist does. So the poor contribute more than the well off!

 

 

But of course, Therapist's man servant will be earning far less, meaning his 3p in the pound tax will work out cheaper than paying the Band rate of council tax, so he'll be far happier.

 

And even the wealthiest of folk have income, or are you suggesting they do not pay income tax at all? I'd be surprised if HMRC allow the richest not to pay a single thing to the Treasury each year by fiddling how they get their cash

 

And yes..."Trades Union Congress"...wonder what party they support

[Maximus]

The people who are most keen to protect their money are those who have the most and it's usually those very people who have the loudest voice. Which is why this will not happen, any time soon at least.

[upthehill]

But of course, Therapist's man servant will be earning far less, meaning his 3p in the pound tax will work out cheaper than paying the Band rate of council tax, so he'll be far happier.

 

And even the wealthiest of folk have income, or are you suggesting they do not pay income tax at all? I'd be surprised if HMRC allow the richest not to pay a single thing to the Treasury each year by fiddling how they get their cash

 

 

No, they don't pay income tax, they take their money in dividends from their shares, not as a salary. They pay less tax this way. It's not a fiddle, it's legal, and normal practice.

 

http://www.company-wizard.co.uk/guides/PAYE-Dividends.aspx explains it. Local income tax would come from PAYE, not corporation tax, so people like me who take dividends would not pay.

[husref musemic]

http://www.telegraph.co.uk/news/newstopics/politics/scotland/2673729/End-of-council-tax-in-Scotland-to-widen-divide-with-England.html

 

More huge tax cuts for freeloading Scotland all funded by England.

 

Time to boot out the selfish, scrounging Scots for good. They whinge and whine endlessly about 'oor oil' and 'freedom', but when it comes down to it they don't have the guts to vote for independence as they're happy to live the high life on a list of benefits as long as your arm, all paid for in full by the English taxpayer....

 

But then they've been leeching off England for the past 300 years, so nothing changes, with more goodies being dished out just this week by Salmond and Brown's anti-English pact.

 

The Scottish parliament with a voice! I really enjoy engish bitterness these days, sounds like scotland 30 years ago.

 

I Lived down south for five years, never seen dumps (like the entire midlands & north west) and great slums like parts of london. What a hole and all proped up by "the tax payers of the united kingdom".

[Das Root]

No, they don't pay income tax, they take their money in dividends from their shares, not as a salary. They pay less tax this way. It's not a fiddle, it's legal, and normal practice.

 

http://www.company-wizard.co.uk/guides/PAYE-Dividends.aspx explains it. Local income tax would come from PAYE, not corporation tax, so people like me who take dividends would not pay.

 

 

So you're saying you don't pay tax on your income? Or at least you fiddle it to pay the absolute minimum?

 

No wonder you're not advocating a fairer LIT over CT eh

[Toggie88]

An income based tax is the only fair option.

 

The 25 'reasons' against LIT are ridiculous and contradictory.

 

They say that families will be worse off...but we will also have reduced services. Which makes no sense what so ever.

 

The tax is simple. The vast majority of people will save money and those losses will be made up by those with ridiculous pay packets.

 

The whole 'income from shares' issue is another ridiculous one. How many people in Scotland live solely off shares? I bet the figure is in single digits.

[Toggie88]

No, they don't pay income tax, they take their money in dividends from their shares, not as a salary. They pay less tax this way. It's not a fiddle, it's legal, and normal practice.

 

http://www.company-wizard.co.uk/guides/PAYE-Dividends.aspx explains it. Local income tax would come from PAYE, not corporation tax, so people like me who take dividends would not pay.

 

so you don't have another income?

[Sheepie]

So you're saying you don't pay tax on your income? Or at least you fiddle it to pay the absolute minimum?

 

No wonder you're not advocating a fairer LIT over CT eh

 

 

That's just what he's saying - I'm in the same boat.

 

My salary is circa 15k and I pay income tax on this at the lower standard rate.

 

The rest, I take as dividends which I pay corporation tax on, averages out at about 20%.

 

If I were to take it all a salary, I'd be hit by the 40% tax band if my earnings exceeded ?35k (?where does the band start these days??).

[upthehill]

so you don't have another income?

 

No, just 1 from my business. This is how business owners take their money, unless they are sole traders.

 

Most British tax payers have a personal allowance of approximately ?5430 which they can earn each year and not pay any tax on. In this case you could pay an annual salary of ?5430 using the PAYE system and not pay any tax for this proportion of your income. You and your company may still however pay a small amount of National Insurance. The remainder of your income could be made up through dividends (subject to available profits), Dividends do not attract National Insurance and if kept within your basic rate will only attract corporation tax payable by the company, this is dependent on your overall company profits but for small companies should not exceed 19%. Typically this combination of PAYE and Dividends will be more tax efficient than using either of the methods separately.

 

There is a choice of doing it this way and paying 19% tax, or through PAYE and paying 40% tax (with an extra 3p in the pound to come if you have your way) plus NI.

 

That is not a difficult choice to make.

 

There is rather a lot more than a single digit of business owners in Scotland, and you're proposing not to charge us for local services. It's one of the flaws in your proposal, of which they are many.

 

Business are set up as limited companies or sole traders. This extra tax on salaries may well see more sole traders register as limited companies to help ease their tax burden.

[upthehill]

So you're saying you don't pay tax on your income? Or at least you fiddle it to pay the absolute minimum?

 

No wonder you're not advocating a fairer LIT over CT eh

 

Yes, except it's not a fiddle. It's how our tax system works. Calling it a fiddle makes it sound like some sort of cheat, and it's not.

 

And my point is LIT I would not pay, CT I would, so I'm a turkey voting for Christmas on this one!

[Deodato]

So you're saying you don't pay tax on your income? Or at least you fiddle it to pay the absolute minimum?

 

No wonder you're not advocating a fairer LIT over CT eh

 

This is one of the many problems that a LIT faces in terms of application, enforcement and evasion. It can be explained as follows:

 

There are three pillars in personal taxation, and they stack up in chronological order: income tax, interest tax and shares. By adding a local income tax on top of national income tax, it might not be reflective of gross earning (hence tax base erosion), if it did - you'll need UK support in its adminstration (less independent than before - yet this is an independence based tax) and more options to evade (by stacking your revenues into the second two pillars).

 

How serious a threat would this be to the proposed tax?

 

I would say marginal - sure the opportunity is there, but you need a big saving to make evasion profitable as there's a cost (tax consultants, your own time, risk etc) in adjusting revenue in such a way.

 

You can also counter this threat by forcing self assesment - so the duty is on the tax payer to 'own up' wit stiff penalites if you don't do it properly. This has been suprisingly effective, as cheating the system is not a crime that gets forgotten about in the next year, its on your record for life.

 

And besides, perhaps the LIT becomes easier to pay with online facilities and clearer accountability in terms of what your getting and what the council is not wasting. I'd pay more for an effecient government - presuming they could deliver more, and reduce the burden going forward.

 

Its a delicate debate but you've also got to step back and think about how tricky is it - its 2008 and you're telling me a Western country of 5 million can't develop, enforce, collect and divvy up their own taxes? Its not impossible and it is potentially more equitable.

 

Deodato

[Therapist]

Yes, except it's not a fiddle. It's how our tax system works.

 

Correct.

 

Tax avoidance - minimising one's tax liability - is perfectly legal.

 

Tax evasion - avoiding paying what is legitimately due - is illegal.

 

Incidentally, the SNP's plans depend on HMRC collecting the tax on behalf of the Scottish Government/Councils - something HMRC has said they are unwilling and unable to do.

[upthehill]

Correct.

 

Tax avoidance - minimising one's tax liability - is perfectly legal.

 

Tax evasion - avoiding paying what is legitimately due - is illegal.

Incidentally, the SNP's plans depend on HMRC collecting the tax on behalf of the Scottish Government/Councils - something HMRC has said they are unwilling and unable to do.

 

Correct. Quite why Salmond does not see this as a problem is beyond me. My experience of HMRC is that when they give their considered position on something, that is their position. Their message to SNP now is along the lines of "you turn if you want to. HMRC is not for turning."

[The Vulture]

I Lived down south for five years, never seen dumps (like the entire midlands & north west) and great slums like parts of london. What a hole and all proped up by "the tax payers of the united kingdom".

 

So the entire North West and Midlands are dumps ? You should join SLJ for a chat and have discussions based on vast generalisations.

 

Think you'll find like everywhere, there are dumps and aesthetically pleasing places too.

[Deevers]

Yet another great idea from Fat Alec and Co - a system that makes sure that the Idle Rich and the down right Idle pay nothing. Almost as good as their policy on law and order - consequence free crime.

 

A shower of absolute charlatans the lot of them.