Let’s start with the independence debate. I would normally refer to this as the “fiscal powers” debate but there seems little point as that ship appears to have sailed. Some things are becoming clearer. There is not going to be a second question. The likelihood of serious additional fiscal powers being devolved to the Scottish Parliament if Scotland votes ‘No’ also now seems increasingly unlikely.
It is not difficult to imagine the appetite for even listening to arguments for additional fiscal powers at Westminster in that event. That is where the Devo Plus campaign has got it wrong. And I say this as one of the authors of the Reform Scotland Fiscal Powers papers on which their proposal is based. Devo Plus are arguing for a ‘No’ vote and also that there should not be a second question. Do they really think Westminster will seriously consider devolving further powers to the Scottish Parliament if Scotland votes ‘No’? An article by Jeremy Purvis who leads the Devo Plus campaign can be found here. On a personal note it is disappointing to see that Reform Scotland have now taken a stance on Scotland’s constitutional question by its support for Devo Plus.
The fact that only the Liberal Democrats are going to have a further devolution proposal by the time the referendum takes place reinforces this argument.
So if there is not to be a second question, what do those who have supported devo max previously do? The impact and importance of Jim McColl’s announcement in favour of independence should not be under estimated. A BBC news website report on this can be found here.
Now to taxing the wealthy. Just now politicians seem to talk of little else. Let’s ignore for now what actually constitutes wealth.
Let’s start with an article by George Kerevan on the Scotsman. Kerevan argues against taxing the wealthy, believing that it is arbitrary, complicated to administer, and does not raise enough money relative to the trouble it takes to collect it. His article can be found here.
Nick Clegg wants to ensure that the rich “pay their fair share”. He has vowed to block further welfare cuts until a mansion tax is agreed with his Tory coalition partners. Vince Cable has also spoken out against tax havens and non-domiciles. Then there is Danny Alexander. He has promised tax investigations for all those who own assets worth more than £1 million. The cynic in me says: I have heard a lot of this before and not just on tax reform. What about the banks. Has anything of substance actually been done?
Then there is the evolving love in between Ed Balls and Nick Clegg. Ed Balls told the Independent newspaper that a future Labour UK Government could impose an annual levy on expensive properties, unlike Nick Clegg though, he favours a permanent rather than temporary wealth tax. The article in the Independent can be found here. This does seem more like mischief making than serious policy making given how long the last UK Labour Government were in power.
One reason for my cynicism is a claim made by the SNP this week. The claim is that there are fewer, not more, tax inspectors. I have blogged before on how HMRC’s budget has been reduced and of the large number of HMRC redundancies. If we are serious about tackling tax evasion then you need a properly resourced tax collection agency. Transparency would not go a miss either. How about publishing tax returns? The SNP press release on this can be found here.
So what can be done? HMRC’s High Net Worth Unit has brought in £500 million in extra tax from the UK’s 5,000 wealthiest people since it launched three years ago. The amount collected is well over the original target of £100 million a year. A press release from HMRC on this can be found here. And of course this was achieved in a time where HMRC’s budget has been cut.
Finally on this issue, an excellent article by Iain MacWhirter in the Herald. MacWhirter points to the relative insignificance of the cost of the so called “free services” as compared with the salaries and pensions of the higher-earning public sector workers. The article in the Herald can be found here.
These services are of course not “free”. They are paid for by taxation. Taxation is simply a series of political choices.
The introduction of a 15% rate of stamp duty land tax on corporate buyers in this year’s UK Budget, it is claimed, has had a dramatic impact on the high-value London property market. The article from the online STEP journal can be found here here. I must admit to struggling to see why this is a bad thing.
About 60% of all taxpayers’ complaints against HMRC are upheld on appeal, according to figures from Pinsent Masons. Some 58,110 complaints were made last year, of which more than 33,000 were accepted either by an internal HMRC review or by the Adjudicator’s Office. A report on this can be found here.
Barclays Bank is to cut back on its UK tax planning unit, after a dispute with the tax authorities over ‘aggressive’ schemes tarnished its public image. A report on this can be found here.
Now to matters slightly further afield.
Firstly to America and the never ending saga of Mitt Romney’s tax affairs. Romney has at last published his 2011 tax return. It turns out Romney and his wife paid $1.936 million in taxes on gross income of $13.7 million. That is a tax rate of 14.1%. The article from the online STEP journal can be found here. I suspect that this is not the end of this matter.
Francois Hollande has revealed details of his 75% top rate of income tax for France’s wealthiest citizens. Newspaper reports suggest there are likely to be concessions for married couples, performers and sports stars. Meanwhile the richest man in France, Bernard Arnault, has applied for Belgian nationality to escape the tax. An article on this from the Guardian can be found here. Again, I suspect that this is an issue that is going to run and run.
A Spanish newspaper has reported that the country is about to double capital gains tax on short term gains to 52%. This gives a sense of the level of problems now faced by Spain. An article on this can be found here.
Have a good weekend.
