I pointed out a few days back that I find it difficult to understand why many Scottish Labour Party members hate the SNP as much as the Tories. I'm not particularly fond of them, but really, worse than Tories?
Bob draws attention to the fact that they're going to be pressing forward with their local income tax scheme, a policy also supported by the Lib Dems. In principle I would support this, as the standing council tax arrangement is a regressive joke, and therefore needs some kind of reform. However, there are some pretty big problems. Firstly, there is the fiddling. I get the impression that this will lead to a bureaucratic nightmare of a paper trail. Secondly, local democracy has often been a way for progressive local councillors to ameliorate the effects of the ravages of unrestricted capital in their particular locales. In areas of high unemployment and low wages (remember we're talking about Scotland), who will pay for local social programs and the provision of basic local services?
Local income tax is effectively a route to the nationalisation of local burdens. I'm not convinced that this is a good thing, seen against democratic and decentralised alternatives. This is essentially a stick for the SNP to bash Gordon Brown with, on the grounds that Scotland is somehow underfunded (even when seen against the Barnett Formula).
Further, why should cliched old ladies keep mansions to themselves while other families in the area live in cramped conditions? Isn't it right for government to de-incentivise such behaviour?
Wednesday, September 03, 2008
Local Income Tax
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2 rants:
What the SNP are proposing is NOT a local income tax in any meaningful sense - i.e. a local tax controlled by the local authority. As I understand it, really they are proposing a 'hypothecated' tax, ie they will raise income tax by 3% and distribute the money raised to local authorities - further reducing local autonomy and decision making.
There are mechanisms for setting up a genuine local income tax, but they are bureaucratic and complex, which is probably why the Lib Dems now appear to be modifying their support for them.
Finally, as you hint in your letter, a local income tax is not quite as fair as people sometimes think. It's because - classic Liberal failing - they fail to distinguish between income and wealth. Why should a well off retired couple who live in a nice apartment have their local tax bill reduced, whilst a working couple with two children pay more?
Agree with Tim. Clearly not a LIT. Also must say that while CT is regressive few commentators take account of CT benefit when modelling the ups and downs.
LIT has a terrible effect on extended families, on shared households generally, and on the constipation rating of the housing market. Too many small and very small families (retired) rattling around in big houses.
Giving them no contribution required to local services if not progressive. It stops anyone trading down when many people clearly should do so.
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