There were welcome tax policy changes in the Autumn Statement yesterday. Another Fuel Duty hike was cancelled and National Insurance was cut for younger workers, for example. And it is really brilliant news that the Government has started to include dynamic modelling to show the real benefits of tax cuts – a cause we have been campaigning for since we were founded.
But there is a lot more to be done. The public finances are still in a horrible state. The cuts in green taxes and business rates weren't nearly good enough. And – in a new briefing document – the TPA have set out how careful analysis of the Autumn Statement documents demonstrates more clearly than ever how more action is urgently needed in three critical areas of tax policy: developing dynamic modelling; curbing fiscal drag; and cutting the number and complexity of taxes.
Click here to download our briefing document on the Autumn Statement
You can find out more about how the incredible complexity of the tax system means the Government has hiked 509 taxes (and cut 209 taxes) using the new online TPA Tax Tracker.
Click here to access the TPA Tax Tracker
Information provided by TaxpayerScotland in association with The Taxpayers' Alliance.
POSTED BY TAXPAYER SCOTLAND IN ASSOCIATION WITH THE TAXPAYER
| PERMANENT LINK Monday, December 02, 2013
Put the people first on spending
The proposal for an independent Scotland to have an Independent Fiscal Commission is a good one. But it also requires a reality check; how do we make it independent? And who is “we”?
Some of these questions will be discussed this week by Holyrood’s finance committee.
Professor David Bell of Stirling University has pointed out that “we need to guard against seeing a forecasting body as a panacea for the uncertainties surrounding public finances”. Like all economists he knows that forecasting is a black art at best, and none too accurate.
We would add that the incentives for politicians to fudge the figures and delude even themselves, especially when in a herd, is so high that taxpayers should be highly wary of the gap between announcements and actions.
We think the time has come for the transparency agenda to be geared up further. The one thing that would aid understanding of what government does or plans to do is to make sure we see the price.
For past spending that means publishing every single transaction over £50 in an open display on every government agency website. It’s our money; we need to see where it went.
For future spending that means interpreting all plans in terms of their funding requirements, interpreted in tax take and borrowing needs. In fact, local government has been good at this, showing how individual spending commitments impinge on the Council Tax we pay – although we rarely get an easily digestible report after the event telling us if they spent what they said they would. They bury the bad news in obscure public accounts.
Central government has not been as good, and for the good of Scotland it is time this changed.
Here then is a proper role for the proposed Independent Fiscal Commission, not only to tell the people what our politicians plan to spend, but where it will hit us in our wallets. This institution needs to become a people’s institution through which we vote on the price of plans for how our money is to be spent. In our paper “Whose money?” we proposed a constitutionally protected institution separate from parliament and equal to it in this one area. As such, it would also have the power to suggest a recall of spendthrift parliamentarians should they repeat the errors of the past in letting their promises run away with our purses. If we do go independent and do attempt a currency union, a failure to control tax and spend would cause much Scottish misery. In our view, it is not enough for politicians to say they recognise this risk, given the centre-left consensus in Scotland they need to quarantine themselves from their own mutual infection.
If the independence debate is doing anything, it is raising some interesting issues and thereby testing our politicians about the limits of their powers. We think it worth reminding them that a good place to start thinking about the over-spending issue is the Declaration of Arbroath and its suggestion that government is contractual and that rulers can be chosen (and unchosen) by the community.