What might this mean in practice? Scotland should start with a sensible, but higher rare of income tax. Then it would be necessary to close down most tax reliefs given to boost savings. After that it would be appropriate to tax capital gains as income whilst reform of inheritance tax and its replacement by a wealth tax is long overdue and now possible given the cooperation on tax data that’s now beginning with tax havens. VAT would need to stay, but no one can deny that it is regressive and hits those on low pay hard. In that case a new progressive consumption tax that would be charged on flows through bank accounts, and so charge the wealthiest at the highest rates, would be needed to redress the balance
We actually have a tax system being discussed called a “progressive consumption tax.” The basics of which are a 100% tax relief upon savings.
Effectively, all additions to savings, and earnings from savings reinvested, are tax free. All withdrawals from savings and all earnings from savings which are not reinvested pay whatever the normal income tax is at progressive rates.
I think that a pretty good system as does Bill Gates and so do a very large number of economists. It’s also fine if the Senior Lecturer doesn’t.
But what should leave us gape-jawed in amazement is that the Senior Lecturer doesn’t know of this proposal, is so ignorant of what all those other people who ponder such matters are talking about. What a recommendation for a university teacher, for a reformer of tax systems, eh?