STUC Report on Taxation Options

That the Parliament welcomes the publication of the report, Options for increasing taxes in Scotland to fund investment in public service, by Landman Economics, commissioned for the Scottish Trades Union Congress (STUC); notes the belief that a number of the report’s reforms could be made to the tax system as early as April 2023, and that these could raise around £1.3 billion of additional revenue per year; understands that the report found that reducing the higher rate threshold for income tax from £43,662 to £40,000, reducing the top rate threshold for income tax from £150,000 to £125,140, introducing a new band of 44%, freezing the intermediate rate of £25,689 in nominal terms, and increasing the higher rate by 2% would collectively generate around £867 million in revenue per year; notes that the report estimates that an extra £2 billion per year could be raised in the long term through the introduction of wealth taxes devolved at council level, the replacement of council tax with a proportional property tax, a carbon emissions land tax, a new land value tax for commercial land, reforms to the small business bonus scheme and an increase in the Scottish aggregates levy; believes that the distribution of wealth in Scotland today is profoundly uneven, with the two richest families reportedly holding more wealth than the poorest 20% combined; considers that real-terms cuts to public services and local authority budgets are the wrong priority at a time when the Consumer Price Index has been reported to be at 11.1% and Retail Price Index at 14.2%, leaving most workers worse off as their wages fail to keep pace with inflation; notes the view that what it considers as these progressive tax reforms are necessary to avert the need to implement real-term austerity cuts in forthcoming budgets, and notes the calls on the Scottish Government to commit to what it regards as a prudent fiscal approach that ensures the wealthiest in society, including in the West Scotland region, pay a fairer share of taxation, local authority budgets and public services’ budgets are protected, and all public sector workers are awarded pay rises which reflect the rate of inflation.