Deducting from wages makes sense.

The same bands are used for all Councils in England, and if everyone has a big house they just pay less because of the balance of houses in their area.

The issue with LIT is that even in a high value area it is capped at Band H, which is double Band D and triple Band A, so the most the highest earner needs to pay is three times the poorest and LIT would change that particularly in areas with wide variations in wealth.

That will be more pronounced in the South East but has dangers for Labour because the better off are more likely to dislike it, and are more likely to vote than the poor and indeed turn to the Tories where the Tories need to win to form a Government.

Falkirkbairn01,

If your generation need to pay more it will only be on the basis of earnings so if you don’t earn much you won’t pay much, it is as you say a progressive tax.

As to student debt the SNP wants to remove the graduate endowment Labour opposes it. We are also introducing grants for first time buyers.

Given that you have said that; “I wouldn’t want to pay a tax which benefits others and I receive very little”, I have to ask exactly what are you doing in the Labour party as you seem to be against one of it’s core principles.

As to the house with 5x£20,000 these are the projections for Scotland,

________________________________________________________________________

Key Findings:

Between 2004 and 2024, the number of households in Scotland is projected to increase by 13 per cent to 2.5 million – an average of 14,800 additional households per year

Over the same period, Scotland’s population is projected to increase by just 0.8 per cent. Therefore, most of the projected increase is the result of more people living alone or in smaller households.

The average household size is projected to decrease from 2.22 people in 2004 to 1.97 in 2024

Scotland’s population is ageing, with more people in the older age groups and fewer in the younger age groups. This has an impact on household structure, as children tend to live in larger households, and older people in smaller ones

Household type

There is a large projected increase in households containing just one adult, from 770,000 (34 per cent of all households) in 2004 to over a million (42 per cent) in 2024

Older women are more likely than men to live alone.

But the number of men living alone is projected to increase more rapidly, from 330,000 households in 2004 to 490,000 in 2024, an increase of nearly a half.

The number of men living alone who are aged 85 or over is projected to increase from 9,000 to 22,000

There are also projected increases in other small households. Households containing just two adults are projected to rise from 670,000 to 810,000, though there is a projected decrease of a quarter in the number of middle-aged two adult households.

The number of households containing one adult with children is projected to rise from 150,000 to 200,000

In contrast, the number of larger households is projected to fall, with households containing two or more adults with children decreasing from 460,000 (20 per cent of all households) in 2004 to 320,000 (12 per cent) by 2024.

There is also a projected decrease in the number of households containing three or more adults, from 200,000 to 150,000

_________________________________________________________________________

On this basis I would say that the number with 5 people on £20,000 could be as low as 50,000 out of 2.5m which is 2% of the total.

Even if it was 100,000 it would still be only about 10% of the number of single adult households.

In short like the unearned income argument you seem to be using the potential impact on a small number of people to undermine a reform that will not only benefit the majority but which will give the largest benefit to the worst off.

Far from undermining the welfare state removing the tax burden from the poorest will strengthen it.

The best reform we can make of the welfare state is to move away from means testing, credits and benefits to a system where we don’t send out tax bills to people with no money who then have to make claims so that the state gives them money to pay the bill it sent them.

I see no reason why deducting tax at source via PAYE along with income tax will be an additional burden to business and it is cheaper to do and easier to collect than the Council tax.

As to your Scottish marginals,

Stirling; Lab majority 4676 (11%), Eastwood (Renfrewshire East); Lab majority 6657 (14%), Edinburgh South; Lab 405 (1%).

Only one is a marginal and that is to the LibDems who support LIT.

With 41 out of 59 seats Labour isn’t going to lose the election to the Tories in Scotland but it can in the South east and that is where the battle will be fought.

Labour can’t fight the Tories in the home counties when it is advocating a different policy in Scotland and electorally the home counties are where the election will be won. Therefore Labour in Scotland must hold the line and oppose a policy in Scotland that would be bad in the south of England.

It’s a consequence of the triangulation of the two main parties and the fall out of Poll tax that makes a radical move on Local taxation a high risk move and lets face it GB isn’t a high risk politician.

Peter.

Don’t get me wrong here, I accept that council tax isn’t great and I am generally an advocate of progressive taxation, however, I do see the problems of a LIT.

Being 21 I can see firm problems for myself of paying this tax. What it will do it will cause an intergenerational shift, which means that my generation will have to pay more. Many people my age are already struggling with student debt and are struggling to get on the housing ladder. Personally I wouldn’t want to pay a tax which benefits others and I receive very little, thsi has serious repercussions for the future of our welfare state. It is also very misleading for the SNP to say that it will only affect families on a large income. This is not true. If a Household has 5 people in it and the average income is £20000 then this means that they will be much worse off.

To use one of Alex Salmond’s favourite countries-Denmark-I will try to describe the problems that can be created for business. Ultimately it will be businesses that will pick up the bill at the expense of employees, this is in contrast of Alex Salmond’s policy of bringing the best business to Scotland, as all it will do is reduce competitiveness, and ultimately cost jobs for working Scots.

The point also that Scottish Labour are opposed to it because of Middle England is frankly crazy. There are many middle class areas which are key marginals. By this i mean Stirling, Eastwood and Edinburgh South these should also be noted that they are Labour marginals where they could determine the next Scottish Govt/Executive.

I don’t see why – council tax ,related to property values which are much higher in London, isn’t necessarily higher than one based on income. The same amount of money has to be raised.

LIT in my borough would probably hurt me, since my income is high and the value of my property relatively low (though still much higher than in Falkirk or the Black Isle!)

I’d like to see a breakdown of winners and losers in a LIT system, but I suspect the voters would appreciate a system that was more akin to affordability than to house values.

John didn’t answer the first question well, but did recover later, though the damage was done.

The basic answer to the “Investment Income” issue is;

“Is it right to stop a reform that will benefit almost 500,000 Scottish pensioners, many of whom are in the bottom quarter of the population by income because it will also benefit a few hundred pensioners who are in the top 5%”.

No tax is perfect and as the ratio of worthy recipients to unworthy is close to 1,000 to 1 , this one should go ahead.

To be honest the fact that the Labour party seems to be supporting what is clearly becoming an orchestrated campaign by people who will be asked to pay more ( Senior journalists, Newspaper editors and proprietors , CBI Scotland) to find any excuse to stop LIT is at complete odds with it’s traditional principles.

The harsh reality is that LIT would be a vote loser in the Home counties and London where incomes are high and where the Tories need to win.

Therefore to spike Tory guns there Labour won’t back LIT, and if London won’t back it Holyrood can’t be allowed go the other way. So labour in Scotland is left to defend a discredited tax that goes against it’s instincts.

That’s one of the reasons that Labour membership in Scotland is falling while the SNP’s is climbing steadily.

As to the problems with the Council tax freeze, I am not actually aware of any Labour Council group in Scotland, including Glasgow where you are in power, putting forward a motion not to freeze it and raise it instead.

It’s a bit rich to complain about the consequences of a Council Tax freeze when you weren’t actually putting forward an alternative or opposing it.

Peter.