Sunday, 27 July 2008

Two Immovable Objects Affect Fairness in Taxes

Look I know a week is a long time in politics but wasn't it just about 48 hours ago that the Nats were still saying they promised to axe the Council Tax? Indeed it is still on their party's website. Only for this morning's Scotland on Sunday to declare that they are to ditch Local Income Tax (LIT) one of their key election pledges of only last May.

It brings us to have to look at who is to blame for the failure of bringing in a fairer local tax system, which was to have been based on the ability to pay it. My conclusion is that both Labour and the SNP are too busy playing politics with each other to actual achieve something for the benefit of people who will gain most.

Now I have had elected Labour representatives agree with me in confidence that the Council Tax is far from fair, of course when talking to me they also add the caveat that they fell LIT is far from perfect as well. However, they also fail to provide anything that is radical and fair as an alternative and are happy to tinker around with the Council Tax. Labour in Westminster have backed up this by threatening to withhold the £400m grant payable to local authorities to offset bills for the lowest paid families, if the council tax was replaced with the LIT. Now surely that £400 million is needed to help provide the services that Scots need or else Westminster would not be offering it in the first place. Even with LIT to help lift the poorest out of paying that grant would still be required. So Labour are holding the Nats plans over a barrel.

However, the SNP may only have themselves to blame. As has been mentioned here before the Nats scheme was to set the level of LIT centrally at Holyrood, removing the tax level setting power from the local authorities who have to spend it. This caused the Labour administration at Westminster to make the threat to withdraw the grant as mentioned above. Now I'm in favour of LIT as over the lifetime of a local income tax payer it will spread the burden of their lifetime payments to when they can afford to pay it, and the majority of people will be better off under it. However, the Nats when they saw a good policy originating from the Liberal Democrats had to tinker with it to make it seem like their own, hence the setting of one level across Scotland set centrally.

Their refusal to budge on this is as much to blame for Scots looking to retain an unfair Tax as Labour refusing to budge on a different local tax system in another part of the UK, ignoring Northern Ireland. As said elsewhere in SoS by Kenny Farquharson Salmond is happy being in "government and opposition at the same time" however in so doing so and refusing to budge in his opposition to Westminster having any sway to get things through in Government is he costing Scotland a chance to change. More and more of his policies are coming up against a brick wall being concurrently built by the Nats on one side and Labour on the other. Maybe the magic of the juggling act of being opposition whilst being First Minister is starting to fade and the public's eyes are starting to open to the slight of hand for what it is a cheat, a scam, a slight of hand and mouth.

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