The SNP should call it Quits on LIT

News that HM Revenue & Customs are to write to John Swinney to inform him they do not have the power to collect Local Income Tax on behalf of the Scottish Executive should surely consign LIT to the political dustbin!

The Scotland Act allows the Scottish Parliament to vary the level of income tax set by Westminster by 3%, up or down, but it does not make any provision for HMR&C to collect any other form of taxation on behalf of the Scottish Parliament.

I am, in principle, opposed to a Local Income Tax replacing Council Tax for a very great number of reasons. Not least of these is that it will be yet another disincentive to work, alongside many of the current UK governments schemes.

What Scotland, and indeed the UK, needs is government that makes people pay for the services they receive and leaves the public with as much of their own money as is possible. Ordinary people can then decide whether they want to save their money or to spend it on their own personal priorities.

It has been the policies of politicians and the personal greed of individuals that has got us into this recession and it will be the actions of individuals that will get us out of it. For me politicians must now facilitate the role of the individual and not make matters worse for generations to come by consigning them to never ending debt in the form of permanent tax increases to pay for the folly of endless state spending in the good times while keeping nothing back for bad times!

Local Income Tax - A Disincentive To Work Hard And Do Well!

The SNP's proposed abolition of Council Tax to be replaced by a Local Income Tax is quite simply another disincentive to work hard and do well.

No one likes paying tax, unless they have to, but today's proposal by the Scottish Executive to pay for local services based on a supposed ability to pay means that, for the same Council services, two households beside one another might be faced with one paying nothing for their bins to be picked up, their streets to be lit and their libraries to be open while their next door neighbours pay £3,000 a year to receive the exact same services, based on a combined household income of £100,000.

And this of course assumes that the 3 pence in the every pound level mooted by the SNP is actually sustainable. Glasgow City Council calculates that at 3% a Local Income Tax would leave them with a shortfall of £133 million on current budgets - in other words to maintain current expenditure Local Income Tax would have to increase by 50% to 4.5%. Here, in East Renfrewshire, I believe that with our extremely high percentage of population that is either old or young our expenditure, in what is a relatively small local authority, is pretty big per head of population and we too would have to seek to raise the level of Local Income Tax just to be able to maintain the standard of our schools and other services.

And whenever you raise a tax on a regional basis you also find a large number of people who seek to avoid paying that tax. For example, with Corporation Tax in the UK higher than that in the Republic of Ireland a number of large companies have moved their head offices from London to Dublin to take advantage of the tax break this provides. In the case of Local Income Tax, I wonder how many people will register for tax purposes in England, Wales or Northern Ireland to avoid paying a Scottish Local Income Tax were it to be introduced.

In summary, the SNP's Local Income Tax proposal is poorly thought through, will lead to inequities in payment for local services in local communities and will undoubtedly not be paid by those who can afford to find ways of avoiding it. All this would be damaging to the social cohesion of Scotland and potential ruinous to our economy. That is why we must all oppose its introduction and leave no stone unturned until it is consigned to the political scrapheap.