Poor will pay for deficit

“Nicola Sturgeon has said that her party will implement a fairer tax system in an independent Scotland – one in which everyone pays a fair amount of tax based on income”.

Willie Nicolson is obviously very naive (Flawed logic, SN, 17 July 13) as well as politically and logically challenged; firstly for believing Nicola Sturgeon’s sweeping statement and secondly for not researching and understanding all of the SNP’s policies, which will have a knock-on effect on how much tax we will pay in an independent Scotland. 

Salmond argues that setting Scotland’s corporate tax threshold three per cent below that of the United Kingdom’s, which currently stands at 23 per cent but is due to fall to 20 per cent in 2015. Hence inducing a six per cent overall reduction in corporation tax and losing millions of pounds in the process will attract investment, boost growth and create as many as 27,000 Scottish jobs over the next two decades.

Despite the fact that it is proven that this policy is foolhardy (there are those in the SNP who are against it) the First Minister has stuck rigidly to this highly flawed hypothesis.

Canada’s experiment with lower business tariffs is instructive here. Between 2006 and 2012, successive federal administrations slashed corporate tax from 21 per cent to 15 per cent in anticipation that companies would use the savings to hire more staff, invest in research and purchase new equipment.

Instead, they hoarded the cash and hiked pay for their executives, compounding the national deficit and paving the way for additional spending cuts.

This is what will happen in an independent Scotland, but the effect will be compounded by the loss of over 20,000 jobs between Faslane and the Glasgow ship building industry.

Creating a massive deficit in future tax receipts which will be picked up by the poor, the old and over taxed worker.

Gordon Harmer
Brae