Local income tax

Local income tax is an idea whose time has come. Don’t ask me, ask Michael:

Brown’s fallen into Salmond’s tax trap | Michael Portillo – Times Online

I find Portillo has been quietly impressive in his advocacy of sensible, progressive policies in the years since his little-lamented political demise. It makes me think that all politicians should take a parliament or two sabbatical to get their heads showered.


1 thought on “Local income tax”

  1. I can see the political appeal, particularly for Alex Salmond. Economically, I think it is a bad idea. Moving from property taxes to more income tax hurts the productive and benefits the unproductive. Thus society may become a bit fairer (assuming one equates fairness to equality), but it will poorer overall than it could have been. Portillo notes that this is why it appeals more to the electorate in Scotland than elsewhere in the UK.

    Mark Wadsworth has some interesting ideas on taxation. His take on this is here. IIRC, he is not in favour of big cuts in income tax, though he wants a much bigger personal allowance and/or a CBI. He thinks employer’s NI and VAT (or any sales tax) are far worse taxes economically than income or corporate taxes (See this and this). He also supports a land value tax to replace all property related taxes. Nice quote from someone else on LVT.

    I like the idea of a LVT as well, as it is an efficient tax that works to force economic development by land owners, rather than hindering economic activity like just about every other tax. Many advocates for a LVT have been Scottish (including of course Adam Smith), which is not that surprising given that land ownership in Scotland is still highly concentrated in the hands of a very small number of people.

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