SINCE our formation 26 years ago, the Scottish Socialist Party (SSP) has persistently campaigned, called demonstrations, and moved bills in Holyrood for outright, immediate abolition of the unfair, regressive council tax and for its replacement with the progressive, income-based Scottish Service Tax, devised by the SSP, based on ability to pay.

As I recounted in The National in June, this is an immediate, practical application of socialist principles which is well within the Scottish Parliament’s powers, despite the devolution straitjacket. And it would double funding for councils!

What’s wrong with the council tax?

The council tax was rushed in by John Major’s Tory government after Maggie Thatcher was toppled by the 18 million-strong anti-poll tax movement, which organised mass non-payment of that outrageous flat-rate tax – led by those of us who went on to form the SSP.

From day one, the council tax was regressive, reinforcing inequality, bearing no relation to people’s incomes or ability to pay. And it favours the rich: whereas the council tax claims 5.2% of total income from the poorest 20% of people, the richest 20% contribute a mere 1.7% of their income.

READ MORE: Why is council tax unfair and why does it need reforming?

The greater the poverty and social needs of a council area, the higher the council tax bills. Before the poll tax and council tax were introduced, the differential between the lowest and highest domestic rates bills was 14:1.

Now, despite a few tweaks to higher bands by the Scottish Government, the differential between Band A and Band H council tax is only just over 3:1.

How does the council tax add to inequality?

There are eight council tax bands (A-H), based on 1991 property valuations. The most common, paid by most working-class people, is Band D. Scotland’s average Band D council tax bill is £1356 (but for example it’s £1499 in Glasgow).

So, a worker on the “adult” minimum wage of £11.44 an hour, living in a modest two-bedroom flat with no garden, must fork out £113 per month for shrinking council services and facilities no matter how few hours a week they work.

Living on another planet, the richest man in Scotland is Anders Holch Povlsen, whose estimated wealth is £8.5 billion, according to The Sunday Times Rich List (having seen a £2bn increase in one single year).

Povlsen is Scotland’s largest landowner, with at least 222,000 acres. One of his several castles is Aldourie, on the banks of Loch Ness, nestling in 500 acres of gardens, ancient woodland and wildflower meadows.

The Baronial-style sprawling building sports 12 bedrooms, a Great Hall, libraries, Lairds Room, breakfast room, and other luxuriant spaces. He bought it for £15 million in 2015, adding to a portfolio that includes a dozen Scottish estates.

At the very most, Povlsen had to pay £3361 council tax on this wee house to Highland Council in the year his wealth ballooned by £2bn. Only two-and-a-half times the bill confronting our minimum-wage worker in a two-bedroom flat with no outdoor space.

What is the SSP’s Scottish service tax?

The SSP has a long-established, fully costed means of ending this grotesque inequality in contributions to local services, based on personal incomes.

We devised the Scottish Service Tax (SST) with six income bands, and progressively rising rates of taxation. The first £12,000 of a person’s income is entirely exempt, zero-rated; the income bracket from £12,000 to £30,000 pays 4.5% towards local jobs and services.

READ MORE:  Expert weighs in on alternatives to council tax in Scotland

Then the SST rate increases as income bands rise, with a 10% levy on the £30,000-£50,000 portion of a payer’s income; 15% on £50,000-£70,000; 18% on £70,000-£100,000 and peaking at 20% for all income above £100,000.

A progressive tax, where those with the most wealth contribute the most towards the upkeep of society. It is a redistributive tax, shifting some of the wealth from the rich to the rest of us, in contrast to the council tax, which adds to the obscenely unequal share of wealth going to the 1% from the 99%.

Is it a LOCAL income tax?

No. The fundamental problem with local income taxes is the same as with the council tax and its ugly parent, poll tax. Richer local authority areas have less need of public services and can afford lower rates on their relatively more affluent residents, whereas those councils with the deepest deprivation perversely need to hammer low- and middle-income families with higher bills. It compounds inequality.

Under the SSP’s alternative, rates of taxation would be standardised across Scotland. People with the same income would pay the exact same SST, whether they live in Shetland or Shettleston, Ayr or Auchtermuchty.

The funds collected nationally would then be distributed to councils according to social need, with full input from elected councillors, the Scottish trade union movement, and other representatives of the people.

But would it raise enough funds for local jobs and services?

We periodically examine detailed Scottish Government and HMRC figures on incomes, to meticulously calculate what the SST would raise.

The latest available figures, published in February, are for tax year 2021-22. They produce a startling fact: our proposed socialist alternative would literally double the funds raised compared with the council tax.

Based on those government statistics, the SSP’s Scottish Service Tax would have raised well over £5.3bn that year – double the £2.7bn in council tax collected across Scotland in 2021-2. An increase of £2.6bn! That’s enough to fill the estimated “black hole” in Scottish budgets – with about £2bn to spare.

READ MORE: A service tax would be a good start to getting rid of inequity

It’s enough to not just stand still, protect every job, service and community facility, and freeze every charge for services, but to go far beyond that, with vast investments in radical improvements to life.

The additional £2bn could be invested in building council houses for affordable rent; installing district heating systems to slash domestic heating bills and producing green energy locally; retrofitting every house free of charge, creating jobs while tackling fuel poverty; and introducing free public transport for everyone, on fleets of council-owned electric buses, subways, trams and light railways.

But who would pay for all this, I hear you ask?

The beauty of the SSP’s progressive proposal is that the richest minority would carry the bulk of the “burden”, whereas millions would be better off twice over; both in terms of bills and the quality of public services and facilities.

About 1.8 million adults in Scotland – those on incomes below £12,000 – wouldn’t pay a single penny of Scottish Service Tax – a huge boost to the meagre incomes of low-paid part-time workers, people on benefits and many pensioners – and 75% of households would pay less than they do now.

As it should be in a half-civilised society, a minuscule handful – the 13,000 individuals with annual incomes above £200,000 – would pay a combined total of £1bn; which is 19% of the total £5.3bn Scottish Service Tax would raise.

A worker on £15,000 would only pay £135 for the year. Anyone on £25,000 would pay £585. Someone on the (alleged) average wage of £33,211 would incur a Scottish Service Tax bill of £1381 – still far less than a Band D council tax bill.

An MP – current parliamentary salary: £91,346 – would have to contribute £9652.

And Povlsen, our Danish owner of around 222,000 acres of Scotland, along with the Jenners building in Edinburgh, much of the Asos online retail firm, and a lot more, would be sent a bill for £391,210, based on the £2bn increase to his income that year.

The SSP is determined to popularise the income-based Scottish Service Tax in trade unions and communities and welcomes any invitations to debate and justify our socialist alternative.