I AWAIT with interest to hear how local income tax will work – eg how local is it, for if Scotland-wide at 3p, it is not local. Likewise, it will incur some of the collection difficulties of poll tax, in which people disappeared from the register.
No one mentions land tax, which runs itself for each locality, so reducing administration costs. Land tax applies to different usages of land at locally set rates – eg housing, business, farming, recreational, etc. Rates can be kept simple with a nil rate, a housing rate and a business rate, with each rate defining the usage activities therein. Different activities on a site attract a share of two or three rates, eg shops, offices and flats on one site.
Land tax will benefit flat dwellers as the site tax will be allocated over more than one household. Likewise, vacant brown field sites and empty buildings will pay their full tax regardless of no business activity – this will encourage the development of such sites more quickly.
Land tax is local, simple to administer and offers the possibility of reducing tax on earnings and profits.
L Smith, Edinburgh