Plans by Scottish Ministers to raise 40% income tax threshold are hypocritical

Patrick Harvie MSP, Finance spokesperson for the Scottish Greens, today used General Questions at Holyrood to challenge the Finance Secretary over a "hypocritical" proposed tax cut for high earners.

In the coming financial year, higher rate taxpayers in Scotland, such as MSPs and Ministers, will receive a tax cut of around £178 a year. 

Part of this is the UK Government's change to the personal allowance, which cuts £100 for everyone earning more than £11,500, with the rest due to the Scottish Government's plans to raise the threshold at which people start paying the 40 per cent Higher Rate, from £43,000 to £43,387.

If, instead, the Scottish Government chose to reduce the threshold slightly, people on modest incomes would keep the benefit of the increased personal allowance, but there would be no tax cut for the wealthy.

Patrick Harvie MSP said:

"With power over rates and thresholds of income tax, Scotland can establish a fairer system that makes life easier for those on lower incomes while bringing in additional revenue from those who can afford to contribute more. It's disappointing to hear Scottish Ministers still talking only about whether or not to 'pass on' Westminster tax cuts when they have the ability to design a system with equality in mind.

"Last week the Finance Secretary agreed with me that Westminster's approach is wrong, and indeed the Tory plan is even worse than what’s proposed in Scotland. But if a tax cut for higher earners is wrong when the UK Government does it, it can’t be right when the Scottish Government does it. The plans by Scottish Ministers to raise the 40 per cent threshold are hypocritical, when they have the power to reverse some of the injustice of the UK’s policies. I urge them to reconsider their approach as we prepare to debate the forthcoming Scottish budget.

"If they do not change their plans, I am curious to know what that the Cabinet Secretary plans to spend his extra £178 on."