The 2016 Scottish Greens manifesto [https://greens.scot/scotland-can], launched on Tuesday, is full of important ideas for using the powers of the Scottish Parliament to their fullest: building a more equal, a more democratic, a more socially and a more environmentally just Scotland.
Of all these proposals, the one that dominated discussion yesterday was the one that has come to dominate this election: the demand for tax justice.
The leak of the Panama Papers has highlighted the gross wealth inequality that our economy creates, and the gross tax injustice that helps to sustain that inequality. And yet, despite being the biggest corporate data leak in history, they have barely scratched the surface of the vast and intricate system of financial engineering that has been created to protect the rich from their duty to the rest of society.
But tax had emerged as the major theme of this Scottish election even before the Panama Papers, because this is the first vote that will elect a Scottish Parliament with more than token powers over national taxation.
With the UK Chancellor announcing a tsunami of further cuts in his recent Budget, these powers are arriving just in time. These powers give Scotland the opportunity to stand together against the Tory cuts while tackling inequality head-on – but only if we use them.
The Greens have proposed a comprehensive tax plan [https://greens.scot/sites/default/files/Policy/Fair%20Funding%20For%20Public%20Services%202016.pdf] that, by the end of the coming term of the Scottish Parliament, would be raising around £1.5bn each year to save jobs and services from Osborne’s cuts. Our plan asks those who can afford it to pay a little more, but is also the only tax proposal at this election that would actually reduce taxes on people with below-average earnings or who own a house of below-average value.
Under our income tax proposals, for example, everyone earning less than £26,500 – well over half of the population – would pay less tax. A low-paid worker at the poverty threshold of £14,200 would pay £54 less per year.
A person earning £27,710 would pay a little bit more than now – an extra £2 per month. But we would raise more from the better off; if I’m re-elected as an MSP, I would pay £938 a year more than under the SNP’s plans.
We are also proposing a top rate of 60% for earnings over £150,000 – not only can the very rich afford to pay more, but higher taxes for the richest will help to rein in the runaway inequality that has been supported by decades of tax cuts and Panama-style loopholes for the wealthy.
The 60% rate would mean that Scotland’s highest-paid public employee, the Chief Executive of Scottish Water, would pay £13,607 per year more on his £250,000 salary under our plan than under the SNP’s.
I was very disappointed when the SNP abandoned their decade-long campaign against the discredited Council Tax and announced their plan to keep it. The Council Tax is incredibly regressive – the more your house it worth, the lower the tax rate you pay on it. I hope more Green MSPs will be able to push the SNP to reconsider.
Our long-term policy remains a Land Value Tax, which would stimulate development and drive empty or derelict property back into use. But instituting that requires a full register of land ownership which, while underway, isn’t yet complete.
So for the coming years we are proposing a proportional residential property tax, which, like our income tax plans, would raise more revenue to fight the cuts while cutting taxes for the less well-off.
Much more simple than Council Tax, the residential property tax would be around 1% of the value of the property – the rate would be set by local authorities to restore some local democratic control over taxes – with the first £10,000 of value being tax-free.
The average household in Council Tax bands A, B or C – which represent 60% of Scottish households – would pay less tax than they do today. The average Band A house currently pays Council Tax equal to 1.42% of its value; with the £10,000 tax free allowance and a locally-set rate of 1%, it would pay just 0.8% of its value under the Green plan.
Owners of more valuable property would pay a bit more, with the very largest and most expensive properties paying much more. Because Council Tax is capped at Band H, houses worth way above that threshold get hugely reduced tax rates under the current system. As local tax expert and Green candidate Andy Wightman points out [https://twitter.com/andywightman/status/716202286163341312], the Council Tax on a £3.9m castle is a tiny 0.067% of its value (compare that with the average Band A rate of 1.42%!); under the Green plan it would be the rate, around 1%, as other properties.
To avoid hitting anyone with unexpected bills, we would phase the Residential Property Tax in over the five years of the parliament, and we would keep all of the discounts for single occupancy and assistance for low earners that currently exist under Council Tax.
Along with smaller but still important tax measures like a Derelict Land Tax to bring property back into use, and cancelling the SNP’s planned Air Passenger Duty giveaway to frequent flyers, these plans would give Scotland the ability to resist the coming Tory cuts, and begin to shrink the inequality that divides our nation and blights lives.
Scotland can employ more teachers, pay care workers the wage they deserve, guarantee a good job or education for every school leaver and a future in new industries for every oilworker, build thousands of high-quality council houses and insulate the houses we have, connect the country with excellent public transport and high-speed broadband, and do all of the other transformative things described in our visionary manifesto. The money to do all these things and more is there; all we need is the boldness to demand a tax system that works for ordinary people instead of serving the interests of those listed in the Panama Papers.