Scotland’s Budget Report Preview #2: Potential reforms to income tax in Scotland | Fraser of Allander Institute
by backupJM
Scotland’s Budget Report Preview #2: Potential reforms to income tax in Scotland | Fraser of Allander Institute
by backupJM
3 comments
This is good stuff. Great post.
This chart though. Oooof.
[https://fraserofallander.org/wp-content/uploads/2023/12/Chart1-600×390.png.webp](https://fraserofallander.org/potential-reforms-to-income-tax-in-scotland/)
Good luck to all those in the income range of 42K – 51K…
This report looks at potential reforms that ScotGov could implement to, in particular, amend the high marginal tax rate that occurs at around £50,000
The two reforms looked at and modelled are:
#Reform One
**Proposal**
– Increase the intermediate rate upper threshold to £50,270;
– Increase the basic rate by 1%;
– Increase the intermediate rate by 2%;
– Increase the higher rate by 1%.
**Change in tax receipts income by year from Reform 1**
– 2024-25: +£56Mn
– 2025-26: +£39Mn
– 2026-27: +£20Mn
– 2027-28: £0Mn
– 2028-29: -£37Mn
#Reform Two
**Proposal**
– Increasing the intermediate rate upper threshold to £50,270;
– Increasing the basic rate to 21% between 2024-25 and 2026-27 and to 22% from 2027-28 onwards;
– Increasing the intermediate rate to 22% between 2024-25 and 2026-27 and to 23% from 2027-28;
– Increasing the higher rate to 43% between 2024/25 and 2027-28 and to 44% in 2028-29.
**Change in tax receipts income by year from Reform 2**
– 2024-25: -£131Mn
– 2025-26: -£158Mn
– 2026-27: -£187Mn
– 2027-28: +£240Mn
– 2028-29: +£302Mn
Both reforms would eliminate the higher marginal rate that appears at £43,663 – £50,270, as well as increase tax revenue.
FAI is not endorsing either reform, just modelling suggestions.
How much could be raised by increasing the capital gains tax? All these rich folk with dividends and selling shares only paying only 20%