Following on from yesterday’s article on how the Scottish National Party wants Scotland to become a tax haven, readers may wish to see the analysis by Richard Murphy, of Tax Research UK.
The Greens, UKIP and SNP all presented tax proposals on January 29, in the run up to the election.
Mr Murphy’s analysis is particularly interesting. He wrote: “The SNP announced plans for a tax rate 3% lower in Scotland than the rest of the UK. Which, of course, they can. Except this is firstly an issue for the Scottish parliament and not Westminster so what it has to do with this election is hard to work out.”
It seems quite easy to work out, in fact – the SNP wants to panic the other parties with a tax rate that invites businesses and jobs to go north of the border. What will they do as a result? Set lower taxes themselves, perhaps? And what happens to all our deficit reduction plans then?
Mr Murphy continues by saying it is also hard “to work out how Scotland will make good the resulting shortfall in the Barnet formula funding allocation to Scotland that will automatically follow from this, straightaway, when any increase in tax revenues resulting from this policy (and I stress the word any, because I suspect there will be none) will be a very long time in coming.”
So it’s potentially a kamikaze policy and could do more harm than good.
Mr Murphy states that this policy will create “disastrous consequences for tax competition in the UK” and points out that “its economic consequences for Scotland really do need to be spelt out so people understand them, because they are pretty ugly”.
Yes they are.
How will SNP supporters spin this, one wonders?
Follow me on Twitter: @MidWalesMike
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