Time to talk tax

It is remarkable that tax hasn’t featured more in the referendum debate.

Last week saw its first real incursion into the headlines, initially through the First Minister’s response to a question at his New Statesman speech and then by Johann Lamont asking about it at First Minister’s Questions.

But it was hardly a full exploration of all the tax issues, focusing as it did on whether or not the top tax rate in independent Scotland would be raised to 50p.

The First Minister advised that he has no wish to set independent Scotland at a tax disadvantage to the rest of the UK. Less reported was his reference to the White Paper commitment to not make any tax changes immediately after independence. The reason for this is that tax is a policy issue upon which parties should set out their plans in election manifestoes. Which is as it should be.

UK Labour has already pledged to reinstate the top tax rate, so Scottish Labour saw an apparent opening and seized it. Conveniently forgetting in the process that its conversion to taxing rich people more has been more of an oppositionalist exercise than one it practised while in government. Yes, it did raise the rate but only at the fag end of thirteen years in power. It was in force for precisely 36 days before they lost the 2010 UK election.

And while this was clearly comfortable territory for Lamont, her inability to switch from the script of calling out the SNP as Tartan Tories was telling. The fact that the First Minister joined her in condemning the Tory-Lib Dem cut and aligned himself with comments made by Ed Balls on its inappropriateness in the current climate rather diluted her point.

But we are dancing on a pinhead here. Only a relatively small number of people, particularly in Scotland, pay the higher rate of tax. Surely of much wider concern and interest to most voters is what will happen to the tax they all pay.

Given its all-pervasive influence on our lives and how the types and levels of tax permeate nearly everything we do, it is curious that so little attention has been paid to this vital issue in the debate to date.

Perhaps that’s because the proposals in Scotland’s Future are plausible, workable and sensible. And even likely to encourage more to vote yes.

Labour is wont to seize upon the commitment to lower corporation tax as proof of the SNP being a neo-liberal, big business loving entity which wants to reinforce unfairness in the tax system. That lazy analysis ignores all that is said on pages 117 to 123 of the White Paper.

The section on tax makes plain a commitment to provide independent Scotland with a more efficient tax system predicated on key principles of simplicity, neutrality, stability and flexibility.

These point to a quite different future on tax. One which sweeps away the complexities and inefficiencies that successive UK Governments have enabled through decades and indeed, centuries of layering and applying without removing and reforming.

Even with Gordon Brown’s attempts to simplify income tax when he was Chancellor, legislation on UK tax runs to over 10,000 pages with over 1,000 exemptions. These, in particular, allow for tax avoidance and a whole industry employed in finding them and maximising them for a select few rich enough to employ their services.

So which would have the bigger impact on our country’s collective tax take and the perception of paying dues – removing myriad opportunities to avoid tax or paying slightly more on declared and visible income?

As Alex Massie kindly pointed out to me on twitter, both Alex Salmond and John Swinney have made speeches and given interviews in which they emphasise the no tax rises in independent Scotland position. But that safety first approach is only part of the story. The White Paper makes clear that in the longer term, independent Scotland will do different on tax than the UK: independence provides the opportunity to “design a Scottish tax system based on specific Scottish circumstances and preferences”.

That’s the bit of the narrative Scottish Labour chooses to ignore, the bit that Better Together would rather Scottish voters didn’t know and the bit that the Scottish and indeed, UK media, both left and right leaning, keeps hidden from view.

And that’s because many in Scotland, including undecided voters, are appalled that the gap between haves and have-nots continues to grow. Indeed, austerity has shifted a considerable number of haves into having far less, making them acutely aware of the inherent inconsistencies and unfairnesses in our tax system and elsewhere in our economy. The failure of any UK party to offer anything which punishes the financial institutions for the mess we are in nor attempts to reign in the worst behaviour of buccaneers adds grist to their mill.

If they knew of the existence of a fairer future on tax with independence, it might encourage more to move to yes. It’s exactly the kind of issue the Scottish Government and Yes Scotland should be encouraging all their grassroots supporters to be having conversations with their friends, family and neighbours about.

5 thoughts on “Time to talk tax

  1. We have heard this tartan tory jibe from labourites since 1979 but coming from this lot who are the most right wing in their history. Wonder what Hardie and Maclean would make of them

  2. Pingback: Time to talk tax | Referendum 2014 | Scoop.it

  3. Thanks for the guidance to the relevant part of the white paper. I’ve ploughed my way through most of the white paper but sometimes I cannot remember where I read what.

  4. Some more ammunition for YES,glad to have it,lets use it.

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