HOW do you solve a problem like local taxation?
It's a question every Holyrood administration has comprehensively failed to answer.
With a Commission on Local Tax Reform to report in the Autumn, the issue will come hurtling back into the headlines soon enough. Expect it to be one of the most hotly-contested topics of next year's Holyrood election, with planning of manifestos already in their early stages.
There is broad agreement that the current council tax is no good. As the co-chairmen of the commission pointed out in The Herald yesterday, the system sees someone in a £50,000 ex-council house in Ferguslie Park, Paisley, the most deprived area in Scotland, pay only one third of the bill of the owner of a £1.5 million mansion in The Grange.
Meanwhile, a council tax freeze, brought in by the SNP in 2007 as a short-term measure but persisting to this day, has cost £2.5 billion, with the bill to rise to more than £6bn if it continues for another five years. Nicola Sturgeon's newly-appointed poverty advisor could presumably think of one or two places that the cash spent on a policy that disproportionately benefits more comfortable households could be better spent.
Yet, the council tax freeze remains a vote-winner, and herein lies the problem. All the main parties found themselves backing it in 2011, with Jim Murphy supporting it during the General Election campaign.
How much VAT did you pay last year? But, as the last remaining levy requiring an effort to pay, almost everyone knows their council tax bill, meaning any losers of an overhaul will shriek especially loudly.
Some radical replacements have been suggested to the commission. Among them is a land value tax. As the name suggests, contributions would be based on the value of land alone, ignoring anything built on it. Supporters over the years include Henry George, the feted 19th Century American progressive political economist. One of his followers invented Monopoly in a bid to demonstrate the evils of land-grabbing. Adam Smith was a fan too, with advocates arguing it is all but impossible to avoid, it acts as an incentive to productivity and is a deterrent against unsustainable price booms.
Regular revaluations would mean that people who benefit from taxpayer-funded infrastructure projects - for example those who saw property values rise by being next to an Edinburgh tram stop part-funded by taxpayers in Inverness - pay a bit more back.
Perhaps most significantly, another fan is Joseph Stiglitz. The Nobel Prize winner, who sits on the Scottish Government's council of economic advisors, recently argued that "land taxes can be an important instrument for increasing equality" and, after using statistical modelling, he concluded that "a land tax actually leads to higher wages and a higher level of national output". One wonders whether he has the First Minister's ear on this one. Sir Peter Burt, who knows more than most about the difficulties of reform after his comprehensive 2006 report recommending a levy on a home's value was disowned by Jack McConnell before it was even published, has understandably predicted that a "political fudge" will eventually follow the commission's findings.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article