The Courier & Advertiser (Fife Edition)
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Middle earners may have to get set for possible tax rises
Scots earning more than £24,000- a-year may have to brace themselves for tax hikes that business leaders warn will damage the country’s fragile economy.
Nicola Sturgeon said those on lower wages would be sheltered from the increases – and could see their bills slashed – under her plans to counter UK austerity.
However, the First Minister was warned yesterday by industry of the wider economic toll of cutting take home pay for middle and higher earners.
Scottish Labour said the plans do not come close to raising the £800 millionplus required to defeat Conservative austerity.
Launching her government’s discussion paper, Ms Sturgeon set out four possible new tax systems, which would bring in an extra £80m to £290m a year to the Government’s coffers.
Two of the four approaches would see rises kick in for those on more than £24,000 a year from April next year.
The other proposals mean increased taxes do not take effect until someone earns more than £27,000 or £44,290.
Ms Sturgeon said: “Nothing is a foregone conclusion until the budget is not just presented but passed.
“But I think you can get the sense from this paper today, what I have said previously and what I am saying today, that I think the time is right to consider modest additional contributions to protect the things we hold dear.”
The move could force hikes on teachers, social workers, paramedics and police officers, as well as the highest paid workers in the country, such as partners in finance firms and chief executives.
However, Ms Sturgeon said the exclusive Scottish benefits of not having to pay tuition fees, free personal care and complementary prescriptions mean taxpayers are still getting a better deal north of the border.
Alan Mitchell, from Fife Chamber of Commerce, said those in the private sector will be wondering how much of their pay will be taken by the state to cover pay rises for those in the public sector.
He called on politicians to consider the impact on economic growth and attracting skilled workers “if we make Scotland the highest taxed part of the UK”.
“All the political parties that have publicly supported tax rises have also warned of the severe dangers to our economy of losing workers from the EU as a consequence of Brexit,” he added.
“Perhaps they should heed their own advice when they decide what tax rates are appropriate.”
Murdo Fraser, for the Scottish Conservatives, which oppose tax rises, said: “None of the tax raising plans they’ve announced today will increase public spending by a huge amount – but they will all add to the growing perception that Scotland is a high tax country.”
Jackie Baillie, the Labour MSP, said: “The SNP’s tax plans don’t raise enough to cover the black hole in the budget and keep Nicola Sturgeon’s promises.”
Patrick Harvie, the Scottish Greens’ co-leader, said they have forced the SNP into a rethink, adding: “Sticking with the system we’ve got is clearly now the least likely option.”
David Lonsdale, from the Scottish Retail Consortium, warned MSPs about “heaping further pressure on to household finances” when so many Scottish jobs rely on people spending their money in shops.
And Andy Will ox, from the Federation of Small Businesses (FSB), said they are “unconvinced” raising personal tax will benefit the economy when domestic budgets are being squeezed.
I’ m retired of course and I don’ t have any debt. It’s good to have some savings put away if you can. Lady Mackie of Benshie, 81.
It should be kept steady for now as everything is so up in the air. Connor Maxwell, 25.
We are a family of five and I am contemplating whether we can afford a holiday next year. Mother-of-three Laura Squire, 30.
I feel some local shops don’t help by offering goods on credit and the bills from power companies are over the odds. Edith Boyd, 61 The SNP’s tax plans don’t raise enough to cover the black hole in the budget and keep Nicola Sturgeon’s promises. JACKIE BAILLIE, LABOUR