It's interesting to see prominent cybernats like SNP Tactical Voting and Scots and Independent both trying to rebutt the points made in this Scotsman article highlighting the problems with the SNP's LIT proposals. It is fair to say that some of the 25 points in the article aren't worth taking seriously. However, there are some very valid criticisms.

Firstly, the SNP proposals to levy a 3% tax on income uniformly throughout the country can hardly be described as local. The SNP say it is a tax to fund local services, but let's face it, it won't raise enough money to fund local services in itself, it won't be collected locally, and so people won't perceive any difference between this extra 3% taken out of their pay packets, and the proportion of income tax, VAT or NI that supports local services.

 If we must have a Local Income Tax, I'd much rather it was set locally. This is primarily because it will strengthen local democracy and accountability at local authority level. The SNP can hardly complain that they would like more tax raising/varying powers for Holyrood on one day to Westminster on the basis that they cannot serve their electorate and respond flexibly to the 'unique situation in Scotland' without these powers, and then on the next day deny that our locally elected officials would not benefit from similar powers locally. If it is 'fair' to set taxes at Holyrood, why not locally or indeed at Westminster?

In principle, Greens argue for devolution of powers and responsibilities to the most local level possible. This strengthens local democracy, and gives responsibility to local authorities and elected officials. Greens would obviously prefer a Land Value Tax set locally, rather than a Local Income Tax. 

The other big problem I have with a Local Income Tax, is that it does nothing to support 'hard working families' that most political parties claim to want to support. It may be true that 85% of people will be better off under the SNP proposals because they plan to subsidise the tax centrally. Whilst this makes me wonder what the SNP would need to cut, if they were going to implement their 3% LIT, a quick chat down the pub last night really bought it home to me who 15% who will be worse off are. 

Basically, the worse off are going to be households like mine and my pals. We all have (proportionally to our income) massive mortgages and probably negative equity, tiny flats or houses, both grown ups work in reasonable jobs, one or more children (with correspondingly high child care costs), student loans to pay back, and we are being squeezed by commodity prices rises. We don't have much flexibility to pay more tax, but we will because our households have higher than average earned incomes, even though we have high, pretty unavoidable, outgoings too. 

Now, this contrasts with an older acquaintance of mine. They have two massive homes. One in the city, one in the country. One of them works. In short they're minted. They probably have lots of unearned income. They are lovely. They would benefit massively from LIT, because they hardly have any earned income, relative to their total wealth. As they said to me the other day, 'Tax avoidance is fine and we'd be stupid not to do it. Tax evasion, now that's illegal.' LIT will be an easy tax for the rich to avoid. 

So, my assessemnt of the consequences of the SNP LIT proposals: Great for workless households, great for posh people. Terrible for the lower middle classes. 

The council tax does need to go. It is also unfair. LIT may be more equitable. However, one of the main reasons why a Land Value Tax, as proposed by the Greens, seems fairer to me, is because it would squeeze the right people. The rich would not be able to avoid LVT, because you can't hide land, or offset it, or stick it offshore somewhere.  

If I was a politician, I'd be thinking seriously about which part of the population is most inclined to vote in elections, and what proportion of them would be worse off by my tax proposals. It might make some core SNP voters think again.