commission on fiscal imbalance 合集

The trigger was a letter urging fiscal autonomy cross

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Unformatted text preview: the basic rate (23% in 1999-00, 22% in 2000-01) started at £1,500. Treasury (1999b, p. 99) stated: ‘Effects on the Scottish Parliament’s tax varying powers – statement regarding Section 7b of the Scotland Act 1998: After the changes…, a one penny change in the Scottish variable rate in 2000-01 could then be worth approximately plus or minus £230 million, compared with plus or minus £180 million prior to these changes. In the Treasury’s view, an amendment of the Scottish Parliament’s tax-varying powers is not required as a result of these changes’. The Institute for Fiscal Studies (1999) showed that, until the top decile, the tartan tax would be progressive. On the considerations which led to the tartan tax not being applied at the higher rate, see Heald and Geaughan (1997). 271 Commission on Fiscal Imbalance It is important not to underestimate the significance of the Scottish Parliament having full legislative control over local 28 government structure, finance and taxation. As shown in Section III, local government revenues implicitly finance a part of devolved expenditure. The positions are less developed in Wales (where the National Assembly for Wales controls the operation of the Welsh system but relies upon Westminster for primary legislation) and in Northern Ireland (where most local government functions were taken into central government under direct rule, and where the comparable taxes are lower); however, these positions might change. The constraint on change is political, not technical, echoing the earlier observation that UK citizens have more enthusiasm for public services than for paying taxes. The quickly reversed implementation of the community charge (ie poll tax) has accentuated political nervousness 29 about local authority taxes, business as well as personal, and more specifically about differences between tax rates in 30 Scotland, Wales and England. Two examples illustrate this point. Council (ie domestic property) tax valuations are still based on April 1991 values. In September 2001, there was newspaper coverage of business opposition to the intention of the Minister for Finance and Local Government in the National Assembly for Wales to go ahead with a proposal for a supplementary (ie local authority) business rate in Wales, even though such a proposal, discussed in a September 2000 Green Paper (Department of the Environment, 2000), has been abandoned in England. Control of the entire local government financing system is a major asset for the Scottish Parliament, especially when it is noted that the Autonomous Communities in Spain are bypassed by the central government in Madrid which deals directly with local authorities. In contrast, central government taxation (here referring to the direct activities of the Scottish Executive) is not devolved, but central government charging policy is devolved. The line between taxes and charges is an elusive one. Congestion-type taxes, such as motorway tolls, are those least likely to provoke a reaction from the UK Treasury, which may even like the idea of the devolved bodies taking the lead in such a policy area. Nevertheless, the withdrawal by the Scottish Executive of its own motorway toll proposals reemphasizes...
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This note was uploaded on 03/06/2013 for the course ECON 220 taught by Professor Paulo during the Spring '13 term at University of Liverpool.

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