Thursday, October 02, 2014

Taxing your brain

There has been rather a lot of ink spilt and blogs filled with righteous anger at the proposal of the government in relation to tax.

But, wait a minute, what short memories we all have.   The PM’s forward promise to move the 40% threshold up to £50,000 means that the rate will kick in at the boundary level last seen in 2009/10 under, yes, him, Gordon Brown.  

Let's look at the details. In 2009 the 40% rate kicked in after £37,400 of taxable income.  Under a Conservative government in 2020 after a decade in office it would kick in at £37,500 (£50,000 – £12,500). A move in the right direction of £100… 

Confused?  

Well the threshold drag has been a hard-to-headline stealthy massive tax hike by this government. With no other deductions and no change in the N.I. rate (which surely will be abolished in a final Lawsonian type reform towards which George Osborne is ideologically inclined)  the net take home figure would only be improved by some £2,100 for a £50,000 earner in 2020 compared to 2010 – a 4.2% relief. 

Whereas someone on minimum wages making £12,500 in 2020 compared to 2010 will see nearly a 100% improvement in their net take home pay…

And how are you going to vote in May 2015 if you are not in the higher wage bracket?  Bit of a no brainer really.

What would £420 million buy?

This is quite extraordinary.  

Today in the Scottish Parliament the First Minster announced that he was introducing legislation that was not in his manifesto and therefore, to paraphrase the SNPs words when referring to Westminster, no one voted for, to stop a properly constituted and statutory legal authority from going about its lawful tasks.  Indeed, it is not just a lawful task, it is their duty.

To what am I referring?  Well, there has been a bit of a stooshie now people have realised that there are responsibilities that go with voting.  Paying your fair share of tax being one of them.  No taxation without representation and all that.  It is a two way street.  Don’t pay your lawful taxes and you really shouldn’t be having a say on how taxpayers money is used.

It seems that many people applied to vote in the recent Referendum who haven’t been contributing their fair share over the years.  May be some couldn’t afford to.  That’s a different debate.  Let’s take a car.  You need to be insured to drive it.  So if you get caught without insurance you pay the penalty.  And there is good reason for that.  Uninsured people cause you to pay £33 more every year on your insurance.  However, it’s more than just the financial cost that counts.  As James Dalton from the Association of British Insurers says, “the cost of crashes caused by uninsured drivers pushes up the insurance premiums of honest motorists, as well as being a danger on the roads.”   Uninsured drivers have been shown to be more likely to have an accident and are more likely to be driving an un-roadworthy car.  These drivers kill 160 people every year and cause 23,000 injuries, all without any means of compensating their victims or paying for the cost of living with their injuries.

And my point is?  It’s not the wrongdoer who pays.  It’s you and I.  And so it is with money to local authorities.  Those that don’t pay are making those who do pay pay more. £420m unpaid at the last count.

I can understand for political reasons the bogey man of the Community Charge (aka the poll tax) being wielded out to try and stop local authorities rightfully reclaiming money from that period. 
"However, the relevance of information from the current electoral register to the position of debts from 25 years ago is difficult to fathom, except through some misguided political intention."  So said the first Minster. 

I'm really not sure what planet he is on.  The law is the law.  If people broke it they will eventually have to pay up.  Now is that time.  It’s a slippery slope he is going down.  What else can we look back 25 years and say we are not going to follow up and pursue some other wrong doing?  

Revisionism is creeping in.  People will say, the Community Charge was different.  It wasn’t.  It was a piece of legislation approved by Parliament.  Like it or not (and I don’t), the UK was and remains the parliament for the whole UK.  Until the day Scotland is a nation again, I’m afraid we have to bow to the legislative chamber of the UK.

I suspect I will not be alone in asking the  Scottish Government for moneys that I had to pay to subsidise those who refused to pay repaid to me.  Sounds fair.  Or are we seriously going to allow the Scottish Government to pass a bill that effectively endorses wrongdoing?