The Courier & Advertiser (Perth and Perthshire Edition)
SNP should have raised top tax rate to 50%
Sir, – When it came to making a decision whether or not to divert from Tory austerity policies and increase the top rate of tax for those with an income above £150,000, SNP Finance Secretary Derek Mackay seems to have bottled it.
He has given in to the scare stories that increasing the top rate of tax will reduce the Government’s tax income. No wonder the rich get richer and everyone else has to pay more for the services they need.
At the height of the financial crash, Labour Chancellor Alastair Darling, in his 2009 budget, decided to increase the top rate of tax to 50%. But he made the fatal error of saying that the increase would only apply from 2010. Some of those affected by the rise brought forward their income the year before the tax rise came into force; according to HMRC figures, up to £18 billion of income was brought forward in this way. No conclusions could be drawn about the revenue collected in the first year of the tax because the means to get around the new rate could not be used again.
Despite that, and in defiance of popular opinion, in March 2012 George Osborne reduced the top rate to 45%, saying that the increase to 50% had produced little extra revenue, totalling ignoring the fact that higher-rate taxpayers had been given 12 months to reorganise their finances, and many did so with alacrity.
A confidential study that had previously been brought to his attention said top earners using aggressive avoidance schemes were bringing their income tax rates down to just 10%.
It is about time the SNP grasped the nettle and increased the top rate to 50%.
The idea that people will incur the enormous cost of moving house and changing jobs just to save a bit of tax is a fallacy.
For a supposed socialist party their budget, instead of soaking the rich, drenches middle earners instead, and leaves hardpressed Scottish workers to pick up the cost of maintaining the NHS, educating our children, and providing all the other services necessary for a good life.
Phil Tate. 95 Craiglockhart Rd, Edinburgh.