Tax powers pose a dilemma for Wales

IT’S both surprising and encouraging that almost half of those who expressed a view to our pollsters about whether income tax in Wales should be raised to help safeguard public services were in favour of such an idea.

To do so in the middle of a costof-living crisis displays admirable selflessness by those who themselves are taxpayers.

The poll findings are also interesting because they show variations in opinion between different groups in Wales.

Those who are more affluent are more likely to be prepared to pay extra tax, while fluent Welshspeakers are much more likely to support such an idea than those who can’t speak the language.

The Welsh Government is, however, cautious in its approach to a question of this kind. It argues that it would not be right to raise taxes at a time when most people are struggling financially.

It also points out that the amount of money raised by increasing tax on higher earners would not produce a significant amount of extra revenue.

Such an admission confirms tax data that has previously been analysed by researchers from Cardiff University.

It provides a challenge to those who believe Wales could be made into a more equal country through changes to the fiscal system.

We simply don’t have enough higher earners at present to make much of a difference.

While being granted tax-levying powers under the Welsh devolution settlement was seen as a mark of increasing political maturity, was there any point in getting them if they are never to be used?

Critics of the Welsh Government accuse it of bad faith when its ministers constantly complain about a lack of funding from Westminster.

That’s the excuse given for failing to increase the pay offer to nurses and paramedics.

Yet it would be possible to raise extra funds by putting up income tax rates – something it refuses to countenance.

Perhaps the crunch will come if Labour forms a UK Government at the next general election. Would the Labour Welsh Government still complain about Westminster underfunding or would it seriously consider raising income tax rates to provide more revenue?

The fact is that for Wales to make serious economic progress, it needs to have more higher-rate taxpayers. Increasing the number of jobs at that level would make our future prospects look less daunting.