Monday, 17 March 2014

Tax powers insufficient to address poverty, say Scottish researchers

Tax powers insufficient to address poverty, say Scottish researchers



Current tax-varying powers possessed by the Scottish Government are insufficient to address inequality in the country, according to research by University of Dundee economists for the major Poverty in Scotland 2014 study published tomorrow.
Dr Carlo Morelli and Dr Paul Seaman have contributed a chapter on ‘Redistribution & Income Inequality’ to the book, the result of a unique collaboration between the Child Poverty Action Group (CPAG) in Scotland, The Open University in Scotland, Glasgow Caledonian University and the Poverty Alliance.
The landmark publication, which calls for poverty to be placed at the heart of the referendum debate, draws together the expertise of academics, anti-poverty campaigners and other experts from across Europe.
It suggests that the proportion of children living in relative poverty after housing costs are deducted is forecast to increase from 19.6 per cent in 2011/12  to 26.2 per cent in 2020, meaning between 50,000 and 100,000 more children will pushed into poverty. In response to these figures, experts have set out principles for a more equitable Scotland, whatever the referendum outcome.
The Dundee state that progressive forms of income taxes that focus on the highest earners can have a marked impact on income inequality across the country. However, they go on to claim that limiting the tax varying powers to only the Standard Variable Rate, as is currently within the powers of the Scottish Government, or the single Scottish rate, as will be the case under the 2012 Scotland Act, will do little to address poverty caused by inequality.
“Our analysis shows that the powers currently possessed by the Scottish Government or proposed will not be sufficiently redistributive to help redress Scotland’s entrenched legacy of income inequality,” said Dr Morelli.