Magazine article Public Finance

SNP Local Income Tax Doesn't Add Up, Says Expert

Magazine article Public Finance

SNP Local Income Tax Doesn't Add Up, Says Expert

Article excerpt

A leading public finance expert has criticised the Scottish National Party's plans for a local income tax, claiming they are based on shaky financial assumptions that would create a significant funding shortfall.

Professor Arthur Midwinter argues in a critique of the proposals that the party has underestimated the cost of replacing council tax, as it 'assumes wrongly' that council tax benefits worth £380m, currently paid directly to low-income households, would be transferred to the Scottish budget

He also challenges the SNP claim that it could produce efficiency gains of at least £500m and says the party wrongly assumes that the whole of the £800m held in reserve at the Treasury could be reallocated to Scotland,

His comments follow the publication of details of the SNP's plans. Under the proposals, the tax would be set nationally at 3p in the pound and would be levied on income, but not on savings income. …

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