Thu 26 Sep, 2013

It’s said that nothing in life is certain except death and taxes. If we want to provide good quality public services for all people, from the cradle to the grave as the founders of the NHS and the welfare state intended, we need a culture which accepts that paying our taxes is a moral responsibility. When wealthy businesses – whose profits depend on the rule of law, on public infrastructure and on a healthy and educated population – hoard their wealth in tax havens, they undermine our whole society. When rich individuals set up front companies to employ themselves and get out of paying income tax, they are refusing to pay their share for the services they take for granted.

Those who crawl through tax loopholes aren’t just behaving selfishly; they are sending a signal to the whole of society that looking after one another, and contributing to our collective wellbeing, simply doesn’t matter.

This atmosphere, where tax dodgers pat themselves on the back instead of feeling any sense of shame, makes debating tax very difficult. People are encouraged to forget about the link between the taxes we pay and the quality of public services we provide for one another.

Since its very beginning, the Scottish Parliament has suffered paralysis on taxation. It’s not for the want of ideas. The main area of taxation that Holyrood controls is about the funding of local government, and at various times the political parties have suggested changing the current model of Council Tax, or replacing it with a new property tax, an income-based tax, or with a range of locally defined taxes so that each council can make decisions based on the needs of its local economy. My own party’s preferred option, Land Value Tax, is designed to bring disused land into productive use, and to recover the uplift in land prices which come from public investment or planning permission. So a landowner who profits from permission to build a wind farm, and whose land is connected to the Grid at public cost, would end up paying something back to the public purse. It’s been reported recently that the Scottish Labour Party is now looking again at taxing land values, and we know there are supporters in the SNP and other parties too.

But whichever system of local taxation you prefer, the danger is that after the next Holyrood election we again see a parliament that’s split on the issue, with each party just promoting its own policy and refusing to talk about alternatives. If we’re going to break the logjam, we need to get together and resolve some principles now.

Reforming local taxes won’t be easy, but if we can do it there could be huge benefits for local services and the people who rely on them – which is of course all of us. We could begin to decentralise economic power in Scotland, help close the gap between rich and poor, and create the conditions for building sustainable and healthy communities. Or, as happens all too often in politics, we could spend another four or five years shouting at each other and achieving nothing. Please, let’s get it right this time.

This article was originally written for Glasgow Now

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