Green pressure forces fundamental re-examination of income tax system

Patrick Harvie MSP, Finance and Economy spokesperson for the Scottish Greens, today (2 Nov) pointed to the Scottish Government's discussion paper on Income Tax as further proof that his party is leading the change in Scottish politics.

The Greens have so far been the only party proposing new rates and bands to give lower earners a tax cut, make higher earners pay more, all while reducing inequality and raising additional revenue for public services.

Today's discussions paper from the Scottish Government analyses the positions of the various parties and concludes that the Green proposals would mean:

* 55% of people would pay less tax.
* Everyone earning less than £26,150 would benefit.
* There would be the greatest reduction in income inequality as measured by the Gini co-efficient.

The paper then sets out four alternative options, using between three and six bands of tax, with the six-band option including a lower basic rate of 19p.

Patrick Harvie MSP said:

"Greens have been pushing hard to make use of Scotland's new income tax powers and it's hugely significant that the Scottish Government is now looking at options which are more creative than simply tinkering with the basic rate as some parties have suggested. We have forced a serious examination of the principle of more, fairer rates and bands. Sticking with the system we've got is clearly now the least likely option.

"It's welcome that inequality is being seen as a key test in setting Scotland's rates and bands of income tax, and our proposals clearly come out as best in terms of reducing inequality and protecting low earners. While the fundamental re-examination of the income tax system is a positive step, we should remember that's there is unfinished business with the need to reform the outdated, unfair council tax as well. Scotland has the power to start shifting the focus on tax away from income and toward wealth such as property, where there are far greater inequalities." 


The Role of Income Tax in Scotland’s Budget (Scottish Government discussion paper)

Scottish Green proposals on income tax