ALEX Salmond’s pro-independence Alba party has demanded Scottish ministers ramp up income tax rates on middle and high earners, including a 50p top rate.
Alba MP Neale Hanvey also called for a more complex income tax system of seven bands, two more than the current five, and four more than the three used in England and Wales.
He said the current financial crisis called for the “most radical transformation of Scottish Income Tax Rates since the birth of Devolution”.
The Scottish Tories said such a plaan would be "hugely damaging".
Deputy First Minister John Swinney is expected to freeze or cut income tax thresholds when he sets out the Scottish Budget for 2023/24 at Holyrood on Thursday.
He has warned he faces the toughest financial situation since devolution began in 1999 because of surging inflation and related public sector pay demands.
Chancellor Jeremy Hunt has cut the threshold for the top rate of income tax from £150,000 to around £125,000 and Mr Swinney is likely to follow suit.
However Alba said far more tax could be extracted from the better off, noting an estimated 453,000 higher rate taxpayers fall into the wide bracket between £43,662 and £150,000.
It said the 19p starter, 20p basic and 21p intermediate rates should stay unchanged.
However the 41p higher rate would be split into three, with a “bottom higher rate” of 41p up to £70,000, a “new higher rate” of 42.5p from £70,001 to £100,000, and an “upper higher rate” of 47.5p between £100,001 and £150,000.
The top rate on wages above £150,000, which is currently paid bby just 20,000 people, would rise from 46p to 50p.
Nicola Sturgeon has resisted previous calls to increase the top rate to 50p in case of "behavioural change", with the rich leaving Scotland.
Mr Hanvey said the scheme - which could be introduced using Holyrood’s existing powers - would redistribute wealth in Scotland, with “those with the broadest shoulders in Scotland helping to fund a fairer pay rise for front line workers across the country.”
It would also lead to “Scotland having the best public services possible”.
Mr Hanvey, the leader of Alba’s two MPs at Westminster, said: “At Westminster the austerity driven Tories are setting the agenda around whether the top tax Rate of 45p should remain or be scrapped, whereas the AlbaParty are pressing the case to make Scotland’s tax system even more progressive by increasing the tax burden on those with the broadest shoulders.
“We all depended on our public sector during the pandemic and do so each and every day. Pay for nurses, teachers and front line workers, as well as public services that deliver for the people of Scotland should be our top priority.
“With independence we can ensure that we don’t have the absurd situation of fuel poor Scots in energy rich Scotland, but in the here and now we should use the limited tax powers the Scottish Parliament does have to put clear blue water between Westminster’s attacks on front line workers and Scotland’s recognition of the value of the work they do."
Scottish Conservative Finance spokeswoman Liz Smith MSP said: “Like all Nationalists, Alba seem determined to manufacture any difference they can between Scotland and the rest of the UK.
“But doing so by demanding huge new tax rises and bands will only widen the already sizeable tax differentials that are a major and growing disincentive for anyone wanting to live and work here.
“Scotland is already the highest taxed part of the UK for over a million workers.
"Neale Hanvey’s plan to increase that gap would have a hugely damaging effect on Scotland’s ability to be competitive with the rest of the UK.”
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 hereLast Updated:
Report this comment Cancel