Income Tax Flashcards
In 1979
Direct tax was 33% or 83%
Indirect tax was 8%
2025 Scotland tax
0% 19% 20% 21% 42% 45% 48%
Indirect tax as 20%
National minimum wage is
£12.21
Scotland chose to measure it some of his decisions taken at Westminster
Universal credit of £20 per worker to Scottish families on low incomes
£9750 per hour to tuition fees free
Discuss the possible economic implications of diverging income tax rates between scotland and the rest if the uk
• high earners in Scotland may decide to relocate to other parts of the UK (where they will pay less income tax) (1). This could result in a ‘brain-drain’ of highly skilled workers leaving Scotland (1)
• there may be less supply of labour beyond a certain pay bracket, as individuals consider the opportunity cost of paying the higher marginal rate of income tax (1)
• there are also concerns that Scottish firms may find it difficult to attract senior staff (1) to overcome the higher tax firms have to pay higher wages which increases costs (1) and this could hinder the development of firms in key industries such as technology (1)
• a more progressive tax system may allow for a greater tax take which would allow the Scottish government to use these funds to improve public services (1)
• a more progressive tax system may be seen as fairer and may lead to a more equitable society (1)
• it has been argued by some economists that countries with more progressive tax systems can still experience economic growth and higher standards of living (1), such as in Scandinavian countries (1)
