The SNP: Tough on wealth and tough on the causes of wealth

ANYONE who has ever closely inspected their payslip or completed a tax return is likely to sympathise with the l ate US philosopher Robert Nozick.

‘Taxation of earnings from labour is on a par with forced labour,’ he said. ‘Seizing the results of someone’s labour is equivalent to seizing hours from him and directing him to carry on various activities.’

Letters from the taxman spelling out where tax is spent, recently sent out by Her Majesty’s Revenue and Customs (HMRC), do little to challenge Nozick’s notion that taxation is a form of slavery.

Intended by George Osborne to reassure the taxpayer their hardearned cash i s well- spent, the ‘annual tax summary’ shows that more of voters’ money is spent on the benefits bill than any other area: not exactly an inspiring read for the morning commute.

Now that Scotland has its own tax powers, such a summary may have to be produced north of the Border, but it is unlikely to be any more uplifting than the UK Government’s.

In the heady pre-referendum days of 2014, and the months following, there was much idealistic talk in Scotland of a ‘new politics’ and a promise of democratic renewal.

Fast forward to 2016, with the messy business of the transfer of unprecedented powers f r om Westminster to Holyrood resolved (despite the SNP’s best efforts to derail the process), and the idealism looks a bit, well, jaded. It turns out that the point of getting all those shiny new powers was nothing more idealistic than a tax grab.

Threshold

First there was the SNP’s refusal to duplicate the UK Government’s increase in the threshold for the higher rate of income tax, meaning anyone in Scotland earning £45,000 or more will be £323 worse off when compared to those in England, Wales and Northern Ireland.

Now Nicola Sturgeon has opened t he door to t he possibility of a 50p tax rate for those earning over £150,000, an increase from the current level of 45p, known as the ‘additional’ tax rate.

In the best traditions of Nationalist politics, this was a U-turn on the previous position, which ironically mirrored the stance of the hated Tories – that a 50p rate is counterproductive as it merely encourages more tax avoidance.

Adding to the acute irony was Miss Sturgeon’s assertion that the 50p rate could only be truly effective if introduced UKwide – rather undermining the argument for further devolution of tax power and indeed the argument for, er, Scottish independence.

With an election only weeks away, and sensing howls of anguish from the Left-wingers who voted Yes, she changed tack, insisting that in fact she had not ruled out imposing the 50p tax band for the rest of the next parliament, only f or 2017-18. Her economic advisers will then consider the case for a 50p rate.

This was abolished by Mr Osborne i n 2012 after it emerged that an astonishing £ 16billion of i ncome was ‘deliberately shifted into the previous tax year – at a cost to the taxpayer of £1billion’.

Only about £ 1billion was raised, rather less than the £2.5billion or so that Labour had predicted back in 2009.

There had been an underestimation of the willingness and ability of people earning over £150,000 to minimise their tax bills – for example, simply by moving to a different country.

The SNP initially accepted that the 50p rate was merely political symbolism – sending out a signal for the sake of it.

But shrill protests from Left- ist pro-independence activists who expected more from their ‘movement’ than Tory economics forced Miss Sturgeon into a partial U-turn.

There are only 17,000 people who earn more than £150,000 a year i n Scotland, yet the wealthiest 0.7 per cent of taxpayers pay 13.7 per cent of all income tax receipts. If only 1,300 moved south of the Border, a 50 per cent rate would cost Scotland £30million.

This is the point at which political symbolism moves from the realm of the merely daft or i neffectual to the economically damaging.

But the legion of statist Leftwingers who joined the SNP in their droves after its failed referendum campaign clearly expect rather more than cold, economic logic – they are all about the symbolism. And it is clear that Miss Sturgeon feels she cannot afford to ignore them for electoral reasons.

Labour’s kamikaze high-tax policies guarantee that it is on course f or f ailure of epic proportions at the Holyrood election in May.

But nonetheless they may prove attractive to some of those former Yessers aggrieved that the Nationalists have not done more to advance the politics of class envy.

There is another huge irony underlying the entire debate. The 50p tax rate would not be merely a tax on bankers – though many in the financial services sector would be affected.

The behemoth of the state in Scotland is now so colossal and cluttered with costly quangos that many of those earning upwards of £150,000 are public sector fat cats – not just quangocrats but top police officers and senior NHS officials.

Taxpayers

Nearly one in seven ‘addit i onal r ate’ t axpayers is employed in health and social work, more than in Scotland’s finance and insurance sector, according to the Scottish Parliament Information Centre.

It would be hard to imagine a more damning indictment of Scotland’s failure to nourish the private sector than the fact that many of those earning the truly big bucks are actually on the public payroll.

But while Miss Sturgeon plays to t he gallery and appeases her core support during the election campaign, the unmistakable signal is that Scotland is a hostile environment for anyone genuinely interested in wealth creation.

While all governments boast of creating jobs, the reality is j obs are created in t he private sector by entrepreneurs and the self- employed who take major gambles to get businesses off the ground.

The SNP is no exception, squandering taxpayers’ cash on disastrous and costly ‘green’ initiatives such as the bid to turn Scotland into the ‘Saudi Arabia of wave power’. The strategy’s flaws were shown last year when Edinburghbased Aquamarine Power, which took nearly £28million of public cash, went bust.

Alex Salmond proved again to be the ultimate snake oil salesman when in the run-up to the last Scottish election, he welcomed an announcement from Ignacio Galán, chairman of Spanish company Iberdrola – owner of Scottish Power – that his firm would i nvest £2.7billion in Scottish businesses in the next two years.

Mr Salmond also ‘announced plans for Spanish renewable energy company Gamesa to send a delegation to Scotland to explore opportunities in turbine manufacturing’.

That was in November 2010 – but, predictably, the jobs have yet to materialise. And where would t he proceeds from any rise in the additional tax rate go – presumably other job creation schemes? Well, not exactly.

Despite the benefits bill in Scotland soaring to more than £ 17billion i n 2014- 15, up £253million on the year before, the SNP i s determined to plough more taxpayers’ cash into a system out of control.

So the 50p tax rate, if it were ever imposed, would ultimately help to perpetuate Scotland’s toxic culture of welfare dependency – and drive away the wealth creators.

If this sounds familiar, it is because this scenario closely resembles the future Scotland would have faced if there had been a Yes vote in 2014.

Miss Sturgeon now has a duty to resist the siren call of the class warriors who have swoll en her party’s ranks. The future of Scotland’s economic health depends on it.