Let's increase tax on higher income workers.

[Jon39]

Always a popular policy amongst the voters who are not as fortunate.

More tax means more money to spend on (famous election campaign slogan) Schools and Hospitals.
Or does it ?

Those who pay higher rate tax in Scotland (above £50,271), now pay more income tax, than if they lived in other parts of the United Kingdom.

A Scottish worker on £100,000 will pay £2,606 more in income tax than an English worker on the same salary. A worker earning £150,000 will be £3,858 poorer in Scotland than in England, while a worker on £200,000 will be worse off by £4,858.

Answer simple. Move south of the border, then no need to pay.

A similar sutuation has arisen in the past, with Capital Gains Tax.
Increase the rate and the Treasury has then received less revenue.
Put off transactions and no tax payable.
It has even been shown to work the other way round.
CGT rates were reduced and the Treasury received more revenue.

Edited by Jon39 on Friday 7th April 14:28

[shambolic]

And as long as that money is put to good use then I have no issue.
We get free prescriptions along with other benefits for that extra.

[Adam.]

shambolic said:

And as long as that money is put to good use then I have no issue.
We get free prescriptions along with other benefits for that extra.

Exactly

I am glad to hear it as Scots get higher benefits - isn’t university education free also?

[jonsp]

But wouldn't Scots with the ability/motivation to reach those salary levels have already moved to England to further their careers?

I'd be willing to bet there's more Scottish born people in England earning >£100k than there are Scottish born people in Scotland on >£100k

[skeeterm5]

jonsp said:

But wouldn't Scots with the ability/motivation to reach those salary levels have already moved to England to further their careers?

I'd be willing to bet there's more Scottish born people in England earning >£100k than there are Scottish born people in Scotland on >£100k

Probably true at a statement level. But then the living costs up here are much less than down south, so not really an equal comparison about income and spending power.

[jshell]

Increasing tax often reduces the tax-take and economic benefits.

[Wombat3]

I think most people are happy to pay a bit more tax IF they can see it being put to good use and they don;t see an ever increasing amount of waste and numbers of people freeloading or gaming the system

Governments don't really seem to get this - but then raising taxes is just much easier to do than fixing some of the systemic issues we have.

We also have a situation at the other end where wages have been held down & allowances increased such that for too many people tax is something "Other people pay"/ So they have no skin in the game nor much interest in where public money is spent.

[shambolic]

Adam. said:

shambolic said:

And as long as that money is put to good use then I have no issue.
We get free prescriptions along with other benefits for that extra.

Exactly

I am glad to hear it as Scots get higher benefits - isn’t university education free also?

Yes and bus fares for under 21s etc.

[LHRFlightman]

An old colleague of mine made the move from near Maidenhead to near Edinburgh.

He says the cost of living and general quality of life better in Scotland and he'd never move back.

He's a higher rate tax payer too.

[Mogul]

You pay the 42% rate on earnings above £43,662 in Scotland…

https://www.gov.uk/scottish-income-tax

[NaePasaran]

Jon39 said:

Always a popular policy amongst the voters who are not as fortunate.

More tax means more money to spend on (famous election campaign slogan) Schools and Hospitals.
Or does it ?

Those who pay higher rate tax in Scotland (above £50,271), now pay more income tax, than if they lived in other parts of the United Kingdom.

A Scottish worker on £100,000 will pay £2,606 more in income tax than an English worker on the same salary. A worker earning £150,000 will be £3,858 poorer in Scotland than in England, while a worker on £200,000 will be worse off by £4,858.

Answer simple. Move south of the border, then no need to pay.

A similar sutuation has arisen in the past, with Capital Gains Tax.
Increase the rate and the Treasury has then received less revenue.
Put off transactions and no tax payable.
It has even been shown to work the other way round.
CGT rates were reduced and the Treasury received more revenue.

Edited by Jon39 on Friday 7th April 14:28

Yes very simple. Upping the entire family and moving from your 4-bed detached Edinburgh or Glashow bungalow thats walking distance to the town and buying a 2-bed flat in zone 3 to save £300 a month makes fantastic sense.

PS what do you then do if Labour got in and taxed it the same or 1% more? Pay the 12 grand stamp duty again and upsticks once more?

[jonsp]

Wombat3 said:

We also have a situation at the other end where wages have been held down & allowances increased such that for too many people tax is something "Other people pay"/ So they have no skin in the game nor much interest in where public money is spent.

Good point. Apparently in Germany you start paying tax at ~£8.5k so you've got skin in the game at a much lower level than here. When it becomes your money taken rather than somebody else's it tends to focus the mind.

Maybe make sense to rejig the system so that everybody - even benefit claimants - see some of their money taken in taxation.

[deja.vu]

The sweatys get a great deal If you compare what they get in comparison to what they pay.
Just think how expensive it would be if they actually got independence.

[jonsp]

deja.vu said:

Just think how expensive it would be if they actually got independence.

Which is presumably why they didn't vote for it.

[Am43]

As mentioned above, Scottish tax rates are 42% of income above 43k.
I’m a Scot working in England, no plans to move. I would be lying if I said it didn’t annoy me, but I understand the reasons/justification.

[Ecosseven]

I'm a higher rate tax payer in Scotland. I don't have an issue with paying more tax in principle but as other posters have pointed out, that doesn't mean I trust the government to spend it wisely. The one that really stings in the 54% rate between the Scottish and UK higher rate tax thresholds. NI is reserved to Westminster so Scottish tax payers pay 42% income tax and 12% NI on around £6500 on gross income between the two thresholds. There are a lot of middle earners who will fall into this bracket - I took the decision to increase my pension payments as I felt taking more than half my pay within this band was too much. It's likely others did the same.

I have benefitted from not having to pay Uni fees in the 1990's when I was a student and I've been fortunate that my health has always been pretty good and I've not needed much in the way of prescription medicine.

I have no idea if the higher tax rate in Scotland is a disincentive to attracting and retaining higher earners - there are lots of good things about living here and I have no intention of leaving, as long as Scotland remains in the UK, as the positives outweigh the negatives for me. My partner and I also have elderly parents that rely on us so leaving isn't really an option anyway.

[fat80b]

Ecosseven said:

I'm a higher rate tax payer in Scotland. I don't have an issue with paying more tax in principle

Ok

Ecosseven said:

I took the decision to increase my pension payments as I felt taking more than half my pay within this band was too much. It's likely others did the same.

Errr - so you you do have an issue then ?

Ecosseven said:

I have no idea if the higher tax rate in Scotland is a disincentive to attracting and retaining higher earners

I think you may have proved the point yourself.

Principles count for nothing when you can drop the money in a pension and avoid the extra tax. Or if you can work for the same company but live in England or Wales…..

I could well imagine that most people falling into the bracket in sco would feel and do exactly the same as you have done (as would I).

[Ecosseven]

fat80b said:

Ecosseven said:

I'm a higher rate tax payer in Scotland. I don't have an issue with paying more tax in principle

Ok

Ecosseven said:

I took the decision to increase my pension payments as I felt taking more than half my pay within this band was too much. It's likely others did the same.

Errr - so you you do have an issue then ?

Ecosseven said:

I have no idea if the higher tax rate in Scotland is a disincentive to attracting and retaining higher earners

I think you may have proved the point yourself.

Principles count for nothing when you can drop the money in a pension and avoid the extra tax. Or if you can work for the same company but live in England or Wales…..

I could well imagine that most people falling into the bracket in sco would feel and do exactly the same as you have done (as would I).

I would have accepted a 1 or 2 % rise in come tax to help fund public services, however the 2% rise in income tax + the 12% NI (compared to 2% NI for higher rate tax payers in the rest of the UK) I thought was too much. So I stand by my earlier comment that I am happy to pay higher tax but there is a limit.

I'm guessing most people would pay extra tax if they could afford it and saw the government do some genuine good with the money.

Edited by Ecosseven on Friday 7th April 21:45

Edited by Ecosseven on Friday 7th April 21:47

[Jon39]

(Subject to your checks) Scotland currently receives £41 billion annually from the UK Treasury for spending on devolved matters.
That is 25% more per person (Scottish population) than the equivalent spending per person in England.

The economics of independence would certainly be felt in pockets, but perhaps higher taxes would close the gap.
Is the population in Scotland about 5.5 million ?
So £41 billion divided by 5.5 million equals £7,450 extra tax per person.

Some of the 5.5 million will be children, so current tax payers would need to pay more than £7,450 extra tax.