More than 1,000 higher rate taxpayers fled Scotland to the rest of the UK after Nicola Sturgeon’s government introduced two more income tax bands, a Treasury analysis has estimated.
A paper by UK government economists found the changes introduced in 2018-19 led to 1,030 higher earners moving south, costing Scotland £61 million in tax receipts that year.
“Fled” might also be a bit strong. Decided, on balance, to move?
Rather than the claims being made here it would be fun to know the full and overall numbers. Did the tax rises lead to an increase in income collected? If so, what was the difference between hte amount and that forecast? All that stuff.
Scotland is welcome to share in our bountiful harvest of doctors and engineers to help make up the shortfall.
But, but, but people don’t move just because tax rates increase. Herr Professor Obersturmbannfuhrer Kartoffel tells us so. This must be neoliberal nonsense.
In 2021-22 they thought Scotland only had 18,000 higher rate taxpayers, so losing 1,000 is big (especially as the leavers are likely to be at the top end).
And this study with the 1,000 leavers is from the previous tax hike in 2019. No data available yet for their latest increase.
Sorry, link for above:
https://www.gov.scot/binaries/content/documents/govscot/publications/factsheet/2021/01/scottish-income-tax-2021-2022/documents/scottish-income-tax-distributional-analysis-2021-2022/scottish-income-tax-distributional-analysis-2021-2022/govscot%3Adocument/Income%2BTax%2B-%2Bdistributional%2Banalysis%2B-%2B2021-22.pdf
Maybe not fled. Ebb and flow over time, ebbing but not flowing.
Same outcome though,. Rates up, take down.
Can anyone in government even spell Laffer Curve?
Being a good socialist requires you to keep two opposing ideas in your head at once.
Idea A – massive taxes on alcohol and petrol will stop people drinking and using cars.
Idea B – massive taxes on income and corp tax will not affect the amount of work people do or investment decisions.
As for the remaining higher tax payers in Scotland, I have a strong suspicion that a lot of them are employed directly by the government or in private sector roles which are tightly bound to government (e.g. partner in E&Y who does council audits, management consultants, fake government funded ‘charities’). These roles won’t move but the tax raised is circular. I.e. you raise the rate and it gets fed back into higher wages to compensate these employees for the higher taxes…
Well, that’s the thing, isn’t it? Living in a place is dosh + other considerations. Dosh as in money left in the pocket after taxes and rent. Marlborough means a bit less money than Swindon, but it has nicer architecture and more MILFs. I’d take quite a dosh cut to live in Periguez for the climate.
It’s why Scotland would have to rapidly become very efficient, free market capitalist after independence. You can afford a lot of state wank if the sun shines People will put up with being taxed up the arse. But if it pisses down with rain, they’re going to go to Dorset if the taxes are lower.
Does it matter, when the big fat cheque from us mugs in England is guaranteed?
Can anyone in government even spell Laffer Curve?
There are none so blind as those who will not see, as deaf as those who will not listen or as stupid as those who listen to Richard Murphy
on matter of tax and economics.Western Bloke,
This is Sweden’s problem. People will stay and pay high taxes if there are lots of pretty Swedish girls. But overrun the place with Somalis and the incentive to stay is gone. (Same applies to Minnesota, lately.)
at a personal level then they might be better off coming south of the border, but you have to wonder what the cost of Barnett is, at a country level.