Labour Strives To Make Itself Even More Unpopular In Scotland

Kezia Dugdale, the forgettable leader of Scottish Labour, is furious that the SNP allied with the Evil Tor-ees to block a plan to raise the top rate of income tax back up to Gordon Brown’s eye-watering 50% rate.

LabourList reports:

The leader of Scottish Labour spoke out in anger after nationalists joined forces with the Tories to block plans to raise the tax rate for top earners.

Last night, the SNP voted with the Tories against a Scottish Labour amendment which would have raised the top rate of tax to 50p in the £1 for those earning over £150,000. Scottish Labour propose this as an alternative to austerity, urging the extra funds be spent on public services like the NHS and schools.

Prior to the 2015 general election, the SNP appeared to commit to raising the highest rate of tax for the very wealthiest, as Kezia Dugdale posted on her Facebook page. Ed Miliband included the taxation pledge in Labour’s 2015 manifesto.

Commenting after the vote, Dugdale said “People will be appalled to learn that SNP ministers who campaigned against austerity have now voted with the Tories to block the introduction of a 50p top rate of tax for the richest few earning more than £150,000 a year.”

“When Nationalist ministers present the budget tomorrow they must not simply pass on Tory cuts to local services like schools and social care.”

Scottish finance secretary Derek Mackay of the SNP will be presenting his draft budget at 2.30 this afternoon.

Speaking ahead of the publication of the draft budget, Dugdale said: “The Nationalists claim to be a progressive party. If that is the case, they will use Holyrood’s historic powers to ask those with the broadest shoulders to pay more tax to raise money to tackle Scotland’s schools crisis.”

“If Derek Mackay fails to do that, he is no better than a Tory Chancellor – and he will singlehandedly destroy any claim the SNP has to be a party of the progressive Left.”

Nice try, Kezia. But while the SNP are pretty dumb, they are not that dumb. Even through their own prodigious economic illiteracy, the Scottish nationalists have worked out that there is little to be gained from choking off economic growth with a snarling, punitive tax designed to hurt upper middle class salary-earners (not the “very wealthiest in society” as they deceitfully claim) while bringing in little if any additional revenue. No, the SNP are all about hurting people in the middle, the striving middle class, instead.

Scottish Labour, meanwhile, seem to think that prancing around accusing the SNP of being just like the Evil Tor-ees will see their recently defected voters wake up, realise the error of their ways and come crawling back with gratitude to their shrivelled, dying husk of a political party. I have my doubts. Aside from the sheer immorality of ever proposing to confiscate more than 50 per cent of anybody’s income at any income threshold, Labour have been shouting about evil Tory ideologues for years at the national level, with little effect. Voters want to see evidence of basic economic and governing competence, not virtue-signalling histrionics accusing the SNP of being “no better than a Tory”.

Scottish Labour would be better off holding the SNP to account for shamefully refusing to take powers over welfare from the UK government in Westminster, preferring to carp and moan from the sidelines despite being a supposed party of government.

But seemingly determined to make themselves as unpopular among as many segments of the population as possible (save those who really do want to live by the fruits of other people’s labour), Kezia Dugdale’s grand plan for a Scottish Labour renaissance involves wrapping her arms tight around the bloated corpse of Gordon Brown’s political career and coming at the SNP from the far left.

Good luck with that.

 

kezia-dugdale-scottish-labour-party

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We Should Welcome Tax Competition Between Scotland And England

Scottish Bank Notes - Scotland Tax Rates

Finally, the chance for variety in the United Kingdom’s fiscal policy

There is good news this week for all those who want the United Kingdom to ultimately move in a more federal direction and reconstitute itself as a country where broad swathes of powers are devolved to the four home nations, with only those critical central powers being reserved by Westminster.

The first tentative step on that journey could be about to begin, as Scottish Labour announce that they intend (if elected) to exercise Scotland’s right to vary their income tax rates from the standard UK rates set by the Treasury.

Of course, being Scotland, any divergence will be in an upward direction, as LabourList reports:

Scottish Labour would use devolved powers to raise income tax while ensuring compensation for low paid workers, Kezia Dugdale will reveal today.

In a major speech in Edinburgh this morning, the Scottish Labour leader will set out a clear position to the left of the SNP, by pledging to increase the Scottish rate of income tax to 11p – 1p higher than that proposed by George Osborne and John Swinney. Given the powers mean that income tax rates at each level have to be raised in the same manner, Dugdale will also announce a payment scheme that will boost the salaries of those earning under £20,000 by £100.

Good. It is about time that the United Kingdom saw a greater variety of fiscal policy, and this relatively modest proposal is a good way to start.

However, there are obvious shortcomings. The present mechanism for varying rates is clunky and deliberately difficult to use, with that awkward rule which states that all bands of income tax have to be increased or decreased in lock-step with each other, so that raising the top rate of tax by 1p would also require raising the basic and upper rates by the same degree. This restriction is wrong and unnecessary, and almost worthy of Gordon Brown in its devious childishness.

Why should the Scottish government not have the power to cut the basic rate of income tax but raise the top rate if it so chose? Or why should Scotland be prevented from taking measures to make income tax flatter, if hell froze over and they wanted to move in that direction? There is no just reason for denying Scotland this additional flexibility.

Scottish Rate of Income Tax - Scotland - UK - Fiscal Policy

And yet we should still be glad for this more limited proposal from Scottish Labour, constrained though it is by current laws. Firstly, we should be glad because it will inject an element of real democratic choice into the Scottish elections, and give voters a meaty, substantial policy argument to mull over instead of the endless independence question.

The Spectator celebrates:

Those of you who live in the rest of the UK will have no idea what a relief it is for us Scots to have some real politics to deal with at last. Scottish Labour’s announcement today that it wants to raise income tax for everybody in Scotland is terrific – simply because it means that this year’s election will be a real contest about real policies.

For the first time in years we are going to get an election which is not about the constitution.

[..] So, at last, Scots will face a real, political choice this May. Labour and the Liberal Democrats are on the left, promising to put up taxes and spend more on public services, the SNP is in the middle, promising to do nothing while the Tories are on the right, pledging to reduce taxes, if they can.

Secondly, we should be glad because although the impact of this policy debate will only be felt in Scotland, it may start a debate in the rest of the UK about the advantages of a more federal approach to governance of our union, allowing for variations in key policies to reflect local priorities and sentiments.

Of course, Scotland already has broad powers over healthcare, transport and many other areas of policy – a fact which the Scottish National Party was noticeably quiet about during the referendum campaign, preferring to falsely pretend that the root of all Scotland’s ills lay in Westminster. But such is the prominence of tax policy, felt by nearly everyone, that it is bound to be noticed. And perhaps when people in England, Wales and Northern Ireland see Scotland making adjustments in fiscal policy in line with their local priorities, they will start to make similar demands for fiscal autonomy.

And thirdly, this could be another potentially great opportunity to discredit left-wing orthodoxy on taxation, and begin to cure Scotland of the misguided but prominent notion that steeper taxes and a more harshly redistributive tax regime are the pathway to Utopian social democracy.

The sanctimonious glee with which Scottish Labour yearn to raise taxes is betrayed when Kezia Dugdale says:

We will tear up this SNP budget that simply manages Tory cuts and instead use the power we have to set the Scottish rate of income tax one pence higher than the rate set by George Osborne. This will provide an extra half a billion pounds a year to invest in the future.

It all sounds so wonderful until it actually happens. And then, lo and behold, everybody’s pay packet takes a hit, but any additional revenue which finds its way to government coffers fails to make much of an impact.

In this case, Scottish Labour’s generous estimation is that the move would raise £500 million pounds every year – though one strongly doubts they modelled the likely behavioural impact of this tax change when cooking up their numbers. But even in the unlikely event that this prediction proves to be solid, if all of the proceeds went to bolster education alone (and they won’t), by my calculation it would amount to little more than £700 per child, per year once measures to compensate lower earners hit by the higher tax rate are factored in – hardly the kind of bold spending increase to justify Dugdale’s crusading rhetoric about investing in the future.

Meanwhile, if Scotland raises income tax rates by 1p, the marginal person will decide not to take that job offer and relocate from Manchester to Edinburgh. The marginal person will think again about moving their family or small business north of the border. And since Scottish consumers will have less disposable income in their pockets, the marginal business will go bankrupt or close down. Their numbers may not be great, at first. But Scotland will have become a slightly less competitive place. And northern England will have become slightly more appealing.

But this is good. It is all part of the healthy competition of ideas, which for too long has been suppressed in the United Kingdom by our vastly over-centralised Westminster government. One of the reasons that the SNP have gotten away with their sanctimonious but ineffectual howling at the Evil English Tories for so long has been the absence of any meaningful counterfactual to Conservative policies. With no counterfactual, Labour and the SNP have been able to accuse the Tories of all manner of missteps and claim that their own policies would have been far more beneficial, without any need (or mechanism) to prove their claims.

That time could now be at an end. If the political parties in Scotland become more willing to use the powers of the Scotland Act 2012 to make the kind of biting tax increases that the Scottish people apparently yearn for, we will soon find out whether merrily cranking up the size of the state really does result in a happy population holding hands and singing under a social democratic rainbow, or if it actually leads to something else – the reluctant realisation that there might just be something to conservative fiscal policy after all.

My money is on the latter.

Scotland Income Tax

Chart: Scottish Parliament

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The Green Party, 60% Income Tax And Lessons From The West Wing

 

Natalie Bennett and the Green Party decided to use (or rather, waste) one of their rare moments in the media spotlight this weekend to announce their grand plan to levy a 60% marginal income tax rate on anyone earning over £150,000 a year.

The Greens are not even approaching the issue apologetically, with the tired old claim that confiscatory rates of income tax are necessary to fund public services. No, now they are suggesting that wealthy Brits should be hit with punishing rates of tax because apparently Britain’s brightest minds, shrewdest investors and most successful entrepreneurs “take too much” out of our society:

The highest earners would face a 60p top rate of tax under Green Party plans to make the richest “pay back” to society and deter companies from paying “excessive” salaries.

Britain’s top earners currently face a 45p rate on income over £150,000 but Natalie Bennett, the Green Party leader, claimed that they deserved to pay even more.

“What this 60p is for is really to identify the fact that some people are taking too much out of our society, they need to pay back,” she told the BBC’s Andrew Marr show.

You read that right. The Green Party actually believes that the people who invent things, make scientific breakthroughs, create jobs, run Britain’s top industries and make our art and culture the finest in the world take stuff out of our society. The people who already pay the most tax and keep our precious public services ticking over are nothing more than parasites, according to Natalie Bennett and the Greens.

Clearly Natalie Bennett is not a fan of hit US television show The West Wing. If she was, she would know that even starry-eyed left wingers like fictional President Bartlett’s speechwriter, Sam Seaborn, accept that it is unseemly to bash the rich while taxing them to death at the same time.

In one very memorable quote (see the video above), Sam Seaborn says to a union boss:

“Every time your boss got on the stump and said it’s time for the rich to pay their fair share, I hid under a couch and changed my name. I left [my old job before going into politics] making $400,000 a year, which means I paid twenty-seven times the national average in income tax. I paid my fair share. And the fair share of twenty-six other people. And I’m happy to, because that’s the only way it’s going to work. And it’s in my best interests that everybody be able to go to schools and drive on roads.

But I don’t get twenty-seven votes on election day. The fire department doesn’t come to my house twenty-seven times faster and the water doesn’t come out of my faucet twenty-seven times hotter. The top one per cent of wage earners in this country pay for twenty-two per cent of this country. Let’s not call them names while they’re doing it, is all I’m saying”.

Hard to put it much better than that.

Of course, the Green Party delight in the fact that their radically “alternative” politics place them far to the left of even staunchly left-wing opinion.

But given the harm that a 60% top rate of tax would do – and it would be a catastrophic act of economic self-harm, based on Britain’s historical experience and the cautionary tale now underway in France under President François Hollande – even supporters of greater wealth redistribution may well think twice before endorsing this ruinous policy.

Meanwhile, the rest of us are left to wonder exactly what kind of twisted mind convinces itself that success is a bad thing, to be punished and discouraged at all costs?

The West Wing Green Party Natalie Bennett Sam Seaborn - Taxing The Rich - General Election 2015

Natalie Bennett, 60% Income Tax And The Dark Heart Of The Green Party

Natalie Bennett Green Party Income Tax Top Rate 60 Per Cent General Election 2015 2

 

Imagine an economy that gives everyone their fair share.

That’s what the Green Party website asks us to do, as they pitch their alternative, brave new world to the British electorate.

Put aside the fact that the very idea of a “fair share” is completely meaningless, rendering itself open to redefinition and misuse in any number of ways. What matters is that the Green Party views the economy not as a diverse group of individuals with their own talents, skills and interests, but as a monolothic entity entirely separate from the people, a money-making machine to be cranked up and raided at will in order to fund the social objective of the day.

When you view the economy in this way, it’s natural to see the people who produce and contribute most to the “economy machine” as nothing more than resources to be raided and exploited for the greater good, not as human beings with their own hopes and dreams (and the ability to pick up sticks and move elsewhere if they find themselves being bullied by Big Government).

And it is partly this toxic mindset which drives the Green Party to propose a new 60% top rate of income tax, not just for the yacht-owning super-rich elite but on anybody earning over £150,000 per year.

From the BBC’s report:

The Green Party has announced it would put up the top rate of tax to 60p in the pound.

Party leader Natalie Bennett claimed the move would bring in an extra £2 billion a year for public services.

She said the Greens would like to see a “ten to one ratio between the top paid and lowest paid”.

Not contenting themselves with confiscatory rates of income tax, the Green Party also propose stealing peoples’ hard-earned wealth, which has of course already been taxed at the point it was created (and, in the case of inheritance tax, passed down the generations):

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