You have a choice, Chancellor.
Take £12 billion out of welfare? The impact assessment by your civil servants says that will hit 330,000 children from low income families.
Or put £12 billion onto taxes?
If you decide, Chancellor, to use progressive taxation to fill the £12 billion gap, you might start by boosting the taxes of high income households. There are 2.7m households in the UK in the top decile for household income - with average annual earnings per household of £102,366. With two taxpayers per household, that is £51,183 per person. These folk pay the higher tax rate, 40%, on all income over £31,786.
That 40% tax on those households currently raises £41.4 billion (see "Maths" below).
Raise that tax to 52% (on all income over £31,786) and you raise £12.4 billion, and balance your books.
There is your choice, Chancellor.
Suffer the children? Or ask the wealthiest 10% to pay a wee bit more in tax?
That is the choice Scotland will face at the next Holyrood election. If we want better welfare provision, we're going to have to pay for it.
I'd vote for a Scotland that stopped the suffering of children, and started taxing for a fairer society.
|In practice, of course, the 40% rate applies to many more people. It would also apply to most of the people - another 2.6m households - in the ninth decile, so the £12 billion would be shared amongst more people. A tax rise from 40% to 47.5% would probably do it.|