Cooncil Income Tax

[Colr]

The Scottish Government is to start a consultation in the next few weeks on replacing council tax with a local income tax.

Finance Secretary John Swinney said the plan is part of a 10-year economic strategy to make households £10,000 a year better off.

Red Ken fancies this for London, too.

Suggesting a rate of 2% (which would make me better off but not a lot of the city rich-kids).

What level are they suggesting for Scotland?

[Louis Prima]

I think it was 3% but canny say for certain
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[Colr]

Originally Posted by Louis Prima
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I think it was 3% but canny say for certain
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That would be an increase for me.

How's that work out for you lot? Better or worse off (or no difference).

[Purple & Green]

Originally Posted by Colr
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That would be an increase for me.

How's that work out for you lot? Better or worse off (or no difference).

If you don't pay income tax, then you would be considerably better off.

[Louis Prima]

For me personally I think I would score out of it. But it obviously dependent on what banding you are in plus you household income etc.

[wee 162]

I would be about the same off but reckon this should happen. The council tax is hardly any different to the poll tax considering how close the bands are together. Have to also think that it would be far easier to collect as it would be in the current PAYE format. Lots of efficiency benefits to that since the council tax system is royally fecked and always has been. I do wonder if second homes will also be taxed though...

I wonder if the 3% would be through the discretionary taxation powers of the Scottish Parliament and then just abolish the council tax...

[Colr]

Originally Posted by wee 162
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I wonder if the 3% would be through the discretionary taxation powers of the Scottish Parliament and then just abolish the council tax...

Good point.

[Smurf]

All in favour of this.

However, my real concern relates to the fact that it's not just folk that work who benefit from and use council services.

Lots of folk who perhaps don't work who can perhaps afford to make a contribution more than some who work.

[tortohibee]

im all for this. im due the feckers over 7 grand since i got caught for non payment.

is the uk the most taxed country in the world. on top of that drinking in pubs costs a bomb a house is near on imposible to buy for first timers national insurance and income tax plus £5 for a packet of fags.
i would estimate that over 50% of my money gets pumped back into the government. now its feckin green tax this carbon tax that. as if taxing is going to solve global warming. grudge having to pay for 4 tiers of government on how to distrubute all the money generated whilst the problems of poverty, affordable housing and an underfunded nhs/education system go unsolved.

[wee 162]

Originally Posted by Smurf
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All in favour of this.

However, my real concern relates to the fact that it's not just folk that work who benefit from and use council services.

Lots of folk who perhaps don't work who can perhaps afford to make a contribution more than some who work.

It's income tax, not working tax. All money someone gets is considered income. I do wonder if bru money for example will be subject to this (ie no allowance before you have to pay tax).

Think bru money is about £60 a week so that would be about £1.80 a week or just under a hundred quid a year for someone on the dole. That would actually sound pretty reasonable to me tbh and I reckon they would be better off than under CT.

AFAIC if you can cut the amount of taxation being paid by those earning the least and increase the amount for those earning the most that has to be a good thing. Only thing I could see being a problem would be this might lower occupation density and therefore increase pressures on the already seriously limited housing stock.

[Colr]

Originally Posted by wee 162
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It's income tax, not working tax. All money someone gets is considered income. I do wonder if bru money for example will be subject to this (ie no allowance before you have to pay tax).

Think bru money is about £60 a week so that would be about £1.80 a week or just under a hundred quid a year for someone on the dole. That would actually sound pretty reasonable to me tbh and I reckon they would be better off than under CT.

AFAIC if you can cut the amount of taxation being paid by those earning the least and increase the amount for those earning the most that has to be a good thing. Only thing I could see being a problem would be this might lower occupation density and therefore increase pressures on the already seriously limited housing stock.

It would be good for democracy to take a % of benefits to pay - even if its only £1.80. If your paying you are more likely to take an interest and hold the Council to account if their not performing.

[Smurf]

Originally Posted by wee 162
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It's income tax, not working tax. All money someone gets is considered income. I do wonder if bru money for example will be subject to this (ie no allowance before you have to pay tax).

Think bru money is about £60 a week so that would be about £1.80 a week or just under a hundred quid a year for someone on the dole. That would actually sound pretty reasonable to me tbh and I reckon they would be better off than under CT.

AFAIC if you can cut the amount of taxation being paid by those earning the least and increase the amount for those earning the most that has to be a good thing. Only thing I could see being a problem would be this might lower occupation density and therefore increase pressures on the already seriously limited housing stock.

Good points.

However, what about the guy who retires at 45 with £5 Million in the bank. Large house in Merchiston. Holiday home in the South of France.

What contribution does he make?

[Colr]

Originally Posted by Smurf
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Good points.

However, what about the guy who retires at 45 with £5 Million in the bank. Large house in Merchiston. Holiday home in the South of France.

What contribution does he make?

Why would he not be paying?

[wee 162]

Originally Posted by tortohibee
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im all for this. im due the feckers over 7 grand since i got caught for non payment.

is the uk the most taxed country in the world. on top of that drinking in pubs costs a bomb a house is near on imposible to buy for first timers national insurance and income tax plus £5 for a packet of fags.
i would estimate that over 50% of my money gets pumped back into the government. now its feckin green tax this carbon tax that. as if taxing is going to solve global warming. grudge having to pay for 4 tiers of government on how to distrubute all the money generated whilst the problems of poverty, affordable housing and an underfunded nhs/education system go unsolved.

It’s not even remotely close to the highest taxed in the world. About 35% of UK GDP goes on taxation (think all the Scandanavian countries for starters are pretty close to 50%).

What there is in the UK is an apparent compulsion by the government to continually increase the amount of indirect taxation (ie fags, drink, VAT). These things all adversely effect those on the lowest incomes most. To give an example of what I mean, if someone is on the minimum wage they will earn approximately £190 a week if they’re full time. That’s roughly £10k a year. Say the allowance that everyone has before they pay tax is £4,500 a year. So people theoretically pay around a third of their income in tax and NI after that amount, so their tax should be about £1,800 a year. So they would be paying about18% tax a year. However, if that person smokes 20 fags a day they would then be paying about another 28 quid a week in tax. Which would mean that suddenly their tax would be about 34% per year. In other words, a bigger proportion of their income than someone earning £40k a year who doesn’t smoke does. If the person earning £40k a year does smoke, they are spending roughly only 4% more in tax. The exact same principle applies with VAT on fuel etc.

What would be much fairer would be trying to abolish virtually all indirect taxation and moving the burden to income tax. I would be in favour of indirect taxation only for the costs that something can be held responsible for. So you make an estimate of how much fags cost the NHS each year and set the taxation at that level to recover that amount (it would be less than half of what it is now).

[wee 162]

Originally Posted by Smurf
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Good points.

However, what about the guy who retires at 45 with £5 Million in the bank. Large house in Merchiston. Holiday home in the South of France.

What contribution does he make?

Assuming they get interest of 5% on their £5m (it would be much more) their income would be £250k. I make 3% of that £7,500 a year.

I would also be in favour of a different rate of taxation for earned v unearned income as well fwiw. But that is an entirely different argument.

[tortohibee]

Originally Posted by wee 162
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It’s not even remotely close to the highest taxed in the world. About 35% of UK GDP goes on taxation (think all the Scandanavian countries for starters are pretty close to 50%).

What there is in the UK is an apparent compulsion by the government to continually increase the amount of indirect taxation (ie fags, drink, VAT). These things all adversely effect those on the lowest incomes most. To give an example of what I mean, if someone is on the minimum wage they will earn approximately £190 a week if they’re full time. That’s roughly £10k a year. Say the allowance that everyone has before they pay tax is £4,500 a year. So people theoretically pay around a third of their income in tax and NI after that amount, so their tax should be about £1,800 a year. So they would be paying about18% tax a year. However, if that person smokes 20 fags a day they would then be paying about another 28 quid a week in tax. Which would mean that suddenly their tax would be about 34% per year. In other words, a bigger proportion of their income than someone earning £40k a year who doesn’t smoke does. If the person earning £40k a year does smoke, they are spending roughly only 4% more in tax. The exact same principle applies with VAT on fuel etc.

What would be much fairer would be trying to abolish virtually all indirect taxation and moving the burden to income tax. I would be in favour of indirect taxation only for the costs that something can be held responsible for. So you make an estimate of how much fags cost the NHS each year and set the taxation at that level to recover that amount (it would be less than half of what it is now).

totaly agree with that point.
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[Dub]

Originally Posted by wee 162
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Assuming they get interest of 5% on their £5m (it would be much more) their income would be £250k. I make 3% of that £7,500 a year.

I would also be in favour of a different rate of taxation for earned v unearned income as well fwiw. But that is an entirely different argument.

What about the tax they pay on the interest Al, would that be wiped out in favour of your tax model? FWIW I like the cut of yer jib here
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Especially on the indirect taxation issues but we need to bear in mind that in order for the plan to succeed the Gov would probably need to employ oodles more admin type peeps and would probably employ more than they ned [see hospitals IMO]

Actually now I think about that it could be a good thing as all these employees would pay tax as well.

[Louis Prima]

Originally Posted by Dub
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What about the tax they pay on the interest Al, would that be wiped out in favour of your tax model? FWIW I like the cut of yer jib here
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Especially on the indirect taxation issues but we need to bear in mind that in order for the plan to succeed the Gov would probably need to employ oodles more admin type peeps and would probably employ more than they ned [see hospitals IMO]

Actually now I think about that it could be a good thing as all these employees would pay tax as well.

Good to see you've got the gist of Keynesian economics Dub
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The multiplier effect I think they call it
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[wee 162]

Originally Posted by Dub
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What about the tax they pay on the interest Al, would that be wiped out in favour of your tax model? FWIW I like the cut of yer jib here
To view links or images in this forum your post count must be 5 or greater. You currently have 0 posts.
Especially on the indirect taxation issues but we need to bear in mind that in order for the plan to succeed the Gov would probably need to employ oodles more admin type peeps and would probably employ more than they ned [see hospitals IMO]

Actually now I think about that it could be a good thing as all these employees would pay tax as well.

I'm no sure what the rate of taxation on interest is tbh. My idea would be that all income someone gets would be subject to income tax. That would include dividends from shares, interest, wages, and profit from house sales, the absolute lot basically.