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Scottish local tax study kicks LVT can down road

The Scottish Local Tax Reform Commission has just published its 96 page final report, Just Change: A New Approach to Local Taxation. The remit of the 13-member commission was

“To identify and examine alternatives that would deliver a fairer system of local taxation to support the funding of services delivered by local government. In doing so, the Commission will consider:

  • The impacts on individuals, households and inequalities in income and wealth;
  • The wider macro-economic, demographic and fiscal impacts, including housing market and land use;
  • The administrative and collection arrangements that apply, including the costs of transition and subsequent operation;
  • Potential timetables for transition, with due regard to the 2017 Local Government elections;
  • The impacts on supporting local democracy, including on the financial accountability and autonomy of Local Government;
  • The revenue raising capacity of the alternatives at both local authority and national levels.

Whilst the discussion is comprehensive, it seems to come to no firm conclusions at all in terms of a set of policies that could be implemented to an actual timetable. On the subject of land value taxation, it just kicks the can down the road with this:-

“We believe that a system of land value tax is promising, but that, while the work done for the Commission has been of unprecedented scale, gaining a full understanding of its impact would require further analysis. Any system of administering property based taxation should provide sufficient flexibility in time that site values could form a tax base for a system of land value taxation. Further work should be done over the next parliamentary term to assess both general and targeted land value taxes, and their introduction should be given consideration as part of a broadened system of local taxation.

The report adds little to what has been written by various other committees that have set up to deal with the same subject over the past forty years. It could have saved itself most of its time and effort by simply regurgitating what has been said before. More usefully, the members could have begun by reading the Brisbane report on local taxation, which analyses the subject from first principles.

So these deliberations add nothing useful. One has to wonder what is the point of setting up these commissions when they cannot come down in support of anything? It indicates a combination of conceptual limitation and political cowardice. The best thing about the report is that it contains some attractive photographs of Scottish towns and villages.