Lies Exist in a Vacuum

At the weekend an acquaintance of mine posited that Vladimir Putin would never have dared undertake the Ukraine invasion if Donald Trump was still in the White House. 

 

My response to this preposterously naïve statement was very simple. 

 

The election of Trump in the US, support for Brexit in the UK, the election of Boris Johnson as UK PM and other ridiculous acts of political self-harm all proved to Putin that ANYTHING – no matter how outrageous or distasteful – can be easily accepted in this day and age. 

 

In essence Putin felt unimpeded due to the West’s decline into post-truth and he saw that he could leverage the very same tools to legitimise his savage actions – Trump, Johnson and Brexit were all proof positive that everything is tolerable with spin.

 

As the whole bloody affair plays out it has become abundantly clear that the Russian population must be totally firewalled from the real world to inure them from reality. This job has been done remarkably efficiently with all dissenting voices swept up into police custody as soon as they appear. Support for the war on the Russian street is solid. 

 

There is no “cause and effect” in the traditional sense of events evolving. Instead, the Russian media audience is fed “effect and cause” from the point of view that actions are justified by post-event, post-truth vindications chosen from a lengthy but predictable playbook. 

 

Interviewed by Piers Morgan on 26 April on the new right-wing TalkTV station, Johnson asserted that, “Given the massive Russian backing for what he is doing, given the apparent obliviousness of the Russian media about what is really happening in Ukraine, the paradox is that Putin has far more political space to back down, to withdraw.” Really?

 

Johnson seems to be wholly detached from the reality that the Russian audience does not see any genuineness whatsoever. What Putin does or does not do is occurring in an information vacuum with convenient propaganda. We can foretell a 2022 version of the 1991 Iraqi “Mother of All Battles” where truth is utterly divorced from reality and we have a new player from the 2003 invasion of Iraq in the personage of Dmitry Peskov as a modern-day Comical Ali. Diverting Dmitry perhaps as a spokesmouth for Vile Vlad? 

 

When push comes to shove, poor outcomes in the military and foreign policy spheres – as in every other sphere – are ignored or airbrushed. There is no paradoxical “political space” to act in as, by necessity, it does not exist. 

 

Putin will dare to do whatever Putin decides to dare to do as he operates outside the rules and beyond the influence of any idiot in the White House or any buffoon in No. 10.

Keeping the Faith

This morning on BBC Radio 4’s “Today” Andy Burnham was being interviewed on NHS issues. At the end of the piece Sarah Montague asked him if Labour were not due an apology to Nicola Sturgeon and the SNP for the manner in which the party had used the “leaked memo” as a mode of attack. Fundamentally his reply when broken down into its key aspects was:

1. No.
2. If any apology is due it’s from The Telegraph.
3. We responded in good faith.
4. Anyway, it’s an election campaign.

I was particularly struck by his repeated use of the “it’s an election campaign” line of justification and that exact quote, “we responded in good faith,” is just about as hypocritical as it gets when it is now known that Labour was briefed on the Telegraph piece before it was released.

So by Andy’s logic it is OK to smear someone and continue to do so even when the basis has been wholly discredited; the only apology is ever due by the the originator of a smear and not by those who would wilfully continue to parrot it days after that discrediting as they are not responsible; you can repeat ANYTHING that you hear “in good faith”; all is fair in an election campaign.

So that’s Labour’s election campaign modus operandi firmly established then.

I have to admit that up until this morning’s interview I regarded Andy Turnham as one of the more decent of Labour's leading lights and I told someone exactly that only a couple of days ago. More fool me...

But let’s return to what politicians do in the name of good faith. US President Martin Van Buren declared, “The United States have fulfilled in good faith all their treaty stipulations with the Indian tribes,” so whatever Andy Burnham might consider an apt definition is not a new corruption of civility.

Better Together = Bad Science

Most of us are aware of the system of beliefs known as Creationism, particularly prevalent in the USA, which attempts to discredit evolution and explain mainstream science from the point of view of the Bible – it's a movement which has as one of its main aims the deconstruction of empirical evidence through pseudoscientific methods.

If you are at all sketchy here is a potted version:

God is the Intelligent Creator who made all things and therefore by definition mainstream scientific theories, especially evolution, are heresy. There are different shades of Creationism which attempt to deconstruct science from various angles. Young Age Creationism insists that our world and the entire universe is less than 10,000 years old and has developed on the biblical timeline from Genesis – God created the Earth with the appearance of age so that it seems much older than it really is. At the other end of the spectrum Old Earth Creationism holds that the Earth is billions of years old as mainstream science contends that it is but that the Biblical "days" of Genesis etc. are not days as we know them but longer periods of time or "ages" – some so-called Day-Age Creationists argue that we are currently living in the seventh day of God's Creation (Genesis 2:1-2:3). Really? What a benevolent deity we enjoy. There’s even a branch known as Neo-Creationism which sees ostensibly objective mainstream science as a dogmatically atheistic religion. Neo-Creationists also argue that science, as an "atheistic enterprise," lies at the root of many of contemporary society's ills including social unrest and family breakdown. So science is characterized as a threat to Christianity and must be overcome in the same way as paganism or Satanism.

Regardless of how mainstream science may regard Creationism the movement has a very strong reach in the myriad groups of Christian Evangelicals in the US and soft support from other Christian communities. This came to the point where the teaching of evolution was banned for a period in US public schools. A competing dogma of Intelligent Design (ID) was created and promulgated. In many schools today ID is taught as an academic discipline – Creation Science.

One of the key elements to the spread of Creationism and ID has been that their proponents are only eager to argue on single issues in isolation of other contributing or mitigating factors. Take a single strand of science and strip it back to its basics, create doubt as to how the theory was formed, shine a blinding light on that doubt and introduce fabricated inconsistencies. Then create consistency through highly tenuous and profoundly subjective application of Biblical teaching and, hey presto, the world is explained in Creation Science through scripture. But Creationists despise joined-up thinking. That's too much information to subvert and re-rationalise in one go. Joined-up thinking is the Great Satan of the Creationists as it tends to tear down their flimsy suppositions that have been painstakingly constructed at elaborate length.

In a highly religious society such as the US where Evangelicalism is now the single largest branch of Christianity it can easily be understood how the rise of Creationism and ID in the public consciousness has been totally disproportionate to the credibility or "truth" that lie behind them in juxtaposition to mainstream science. This has unsurprisingly been assisted by the rise of elected Evangelical lawmakers at all levels of US political society.

What might be regarded as "mainstream" in a religious sense has been turned on its head in the past 50 years and our accepted paradigm of what Protestantism actually is in Western Europe is nowhere close to that existing in North America. So, in a Christian sense, Evangelicalism is just about as close as you can get to the religious mainstream in the US today.

So how does this all relate to the Scottish independence referendum?

Better Together as a political movement has so much in common with Creationism – it's a campaign of Political Creationism which has as its main aim the deconstruction of empirical evidence through pseudoscientific methods. Regardless of the body of argument backed by facts and expert testimony from Yes the Political Creationists jump into action and chisel away at fact in the name of preserving the broken Union.

Better Together’s main tactic is to take a single strand of Yes policy and strip it back to its basics, create doubt as to the basis on which the policy was formed, shine a blinding light on that doubt and introduce fabricated inconsistencies. Then create consistency though highly tenuous and profoundly subjective application of Unionist pseudo-facts and, hey presto, we are all Better Together.

The Political Creationists of Better Together are a smart bunch – they know that dealing with joined-up thinking is highly dangerous so they avoid it to the point of cancelling debate. Better Together? Not really, Better One Issue At A Time would be more accurate! Just as with the religious fundamentalist Creationists the BT Creationists can’t handle a well constructed body of evidence when presented as interlinked components.

So what tactics do the BT Creationists use to combat the Great Satans of Salmond, the SNP and independence? Here are a handful of the tools of their trade:

Double Standards: BT Creationists will insist that the pro-independence position “prove” every one of its claims, but BT Creationists themselves never affirm that they need to prove anything. Similarly, BT Creationists argue as if every difficulty faced by the Yes campaign is a clear and irrefutable indication that independence must be wrong, but they apply no such standard to themselves.

Bad Science: BT Creationists creates forums and “grassroots” groupings where they talk to each other. BT Creationists are again, and again, and again, wrong on the facts when they try to refute independence. This would be very tiresome if it were not for the fact that affirming false facts can always sound impressive to people who do not realize that what is being affirmed is false. Mark Isaak’s The Counter-Creationism Handbook makes very clear just how often Christian Creationists make claims that themselves depend upon preceding false claims. Needless to say, such a practice is a clear sign that what one is defending is a very weak position.

Logical Problems: Given all of the effort that BT Creationists put into arguing against independence, one gets the sense that they think that showing that something is not the case proves that something else has to be the case. This, however, is plainly false. Showing that I am not Phil Mickelson does not establish that I am Phil Lawrence. I would have to give independent reasoning for the latter conclusion. BT Creationists, however, suggest that the only alternative to this or that version of thought on independence would be to conclude that unionism is the only truth; and that is clearly false.

Glancing back to the Evangelical Creationists, I pointed out that in contemporary US religion they have become the mainstream. The most common use of the word "mainstream" in independence referendum parlance refers to the mainstream Scottish media or MSM. The MSM has positioned itself, almost exclusively, at the beck and call of Better Together. To this end the BBC, STV, radio, newspapers have almost all become mouthpieces and fellow travellers of Political Creationism.

The Scottish Government published the 650-page White Paper “Scotland’s Future” last November 26th. Even for the most rabid Yes supporter this is neither an answer to every question nor the be all and end all of political modelling for independence. But what it most certainly can be seen as is a huge and all-encompassing exercise in joined-up political and economic thinking, the likes of which have scarcely if ever been seen in the modern political arena.

Of course, by being transparent and all-embracing, the Yes campaign has left itself open to systematic attacks from BT Creationists who can strip out single issues in isolation and then deconstruct these isolated points as if each one is the fulcrum for the entire economy of an independent Scotland.

One of the first things that we were treated to on November 26^th itself was the astonishing revelation that the High Priest of BT Creationism, Alistair Darling, can absorb the essence of books and documents by simply touching them. A matter of 30 minutes or less after the White Paper was published he was able to assert that the Scottish Government, "haven't answered any of the fundamental questions to which Scotland wants the answers." He seemed to be able to give the impression that he had read the entire 650 pages and was able to confidently refute it in its entirety. However the MSM was not too assiduous in pinning down the High Priest. He was able to get off with the Double Standards tool without being tripped up. He was not required to be specific on any policy at all – BT Creationists will insist that the pro-independence position “prove” every one of its claims, but BT Creationists themselves never affirm that they need to prove anything.

Similarly Johann Lamont and Willie Rennie had given their critiques before the day was out without any need to justify to the MSM but Mr. and Mrs. Double Standards had neglected one thing – BT Creationists argue as if every difficulty faced by the Yes campaign is a clear and irrefutable indication that independence must be wrong, but they apply no such standard to themselves.

Early in 2014 the retiring President of the European Commission, José Manuel Barroso, was fairly blunt that Scotland would not be welcomed into the EU with open arms but the Scottish Government and Yes asserted that he was bluffing on the basis of clear advice that they had received from around and from within the EU. When Jean-Claude Juncker was nominated to succeed Barroso there was some hope of a truer picture but when in his acceptance speech he declared that he was not keen to see “new expansion” of the EU the BT Creationists were all over this as a full and certain final avowal that Scotland would not have early entry to the EU. The MSM fellow travellers in Political Creationism splashed it over every front page, webpage, news bulletin etc. However within a matter of hours President Juncker’s own staff had explicitly and unambiguously declared that “new expansion” did NOT refer to Scotland and that he personally, “would not want Scotland to be kept out.” Nevertheless that did not make the front pages – the continued line was that Alex Salmond’s EU trump card was a busted flush. But as pointed out earlier in Bad Science – affirming false facts can always sound impressive to people who do not realize that what is being affirmed is false.

Then there was the amusing interlude of Vote No Borders which was characterised as a grassroots non-party political movement that turned out to be a partnership between a fund manager who has donated six figure sums to the Tories, a colleague who is a senior employee at the Bank of England and a PR consultant. Vote No Borders then made a cinema ad that was designed to demonstrate the policies of this grassroots movement by showcasing young people in Scotland. This was certainly not untrue as several of the policies of Vote No Borders were decided upon by the actors on the set of that ad! Democracy in action, eh? In the end Vote No Borders was narrowed down to approximately three core members with perhaps half a dozen individuals offering support. The BBC and The Guardian were particularly effusive and unchallenging in their coverage of Vote No Borders, underlining its grassroots credentials before expanding on the aims and claims of the “movement” (?) but let’s not forget in the realm of Bad Science – Creationists make claims that themselves depend upon preceding false claims.

The BT Creationists argue passionately that the White Paper pledge of 30 hours of free childcare for every child to assist 100,000 women back into the workforce is do-able now. Well, yes. It is do-able now from a technical point of view as it falls within the responsibilities of Holyrood. But there is no budget to make it happen without stripping £700 million from somewhere else. Alex Salmond regards the policy as “transformational” but because he doesn’t action the policy instantly then it’s clearly defined as impossible from the point of view of a BT Creationist Logical Problem – showing that something is not the case proves that something else has to be the case.

In fact in any number of cases the BT Creationists assert that the Scottish Government has the power or the ability to immediately enact various things that are part of their short-, medium- or long-term goals following independence. However by choosing not to do them at the time or bidding of the BT Creationists the Scottish Government has proven, as a Logical Problem, that the policies are unenactable or that there is no will to enact at any future date– the only alternative to this or that version of thought on independence would be to conclude that unionism is the only truth.

But the Creationist myths continue. This week we have the release of two leaflets in Scotland – one is from Yes and one is from BT. So how do the respective items stack up? The Yes offering is a positive message which takes independently sourced information and uses that to reasonably cost the future. The only part of BT’s message that is certain is that Scotland will indeed keep the pound if the vote is No. The other main arguments – cheaper energy bills, more jobs, more support of public services and a guarantee of more powers for Holyrood are pure supposition – at best wishful thinking and at worst complete hokum. But the BT Creationists are not required to explain how their pledges are achievable. What will the rUK think of the specific promises to Scotland which must inevitably come at a cost to some other sector in the Union? That is entirely irrelevant of course and it is only someone with something to hide who would ask such a question…. Do you get the idea now?

Just remember the following Political Creationist construct:

BT = prosperity, comfort, ambition.

Yes = angels and demons in a spinning, bottomless vortex.

Whatever may happen please keep in mind that bad science is always bad science and double standards are always double standards. In light of what is discussed above take a look at some recent First Minister’s Questions and re-examine a few BT press releases. The modus operandi of the Political Creationist is plastered all over the place but you just have to know what it is that you are looking at. Taking the BT stuff as a body of work and now armed with the key to decoding it all you can pretty rapidly see the common thread.

When religious fundamentalists come knocking on our doors their underlying implicit aim is to scare us into heaven. The Political Creationists of BT are trying to scare us to remain in the Union. But are you ruled by fear or by hope? Choose good science, choose hope, choose Yes.

Taxing Times: A fair tax model for iScotland.

I was drawn to a statement made by my friend Iain Lawson, the former member of the SNP’s National Executive, on his Facebook timeline recently:

“Accountants are unhappy about the Scottish Government tax proposals. I can understand this, what would happen if we had a simplified tax system without hundreds, if not thousands of loopholes?

“Let me tell you from my experiences in Estonia, accountants have to find new ways of making money other than devising tax avoidance schemes.

“Companies have to pay the true tax based on their true profits. What's not to like?”

This set me thinking again as I have put quite an amount of time and thought into considering future models of a Scottish tax system and it prompted me to try to crystallise the better part of 2-3 years of musings into some semblance of order.

A fair and transparent taxation system is a relatively straightforward thing to devise and implement whilst a complicated and opaque system is symptomatic of an arrangement pandering to vested interests in a scatter-gun approach with a certain lack of joined-up-thinking.

So here goes…

Corporate Tax

A great deal of column inches have been written about Corporate Tax (CT) so let’s begin there. The arguments have been pushed along by HMG up to now by my way of thinking and not led by Holyrood. What do I mean by that? Well, the main thing that is talked about in terms of lowering the CT rate is that it will cost the economy in terms of lost revenue. Yes, that is true if you let that isolated fact stand alone but if you then consider the grander purpose of lower CT then that argument is rubbished.

In plain and simple terms, if CT is lower then, all other things being equal, there is the creation of an incentive for inward investment to generate new employment opportunities. These new opportunities see people in work whose salaries attract personal income tax (PT) and national insurance (NI) plus the logical local spend of this newly created wealth. This leads to downward distribution to retail business – among others – and a corresponding entrenchment or expansion of earnings and existing jobs in that sector with corresponding CT, PT and NI enhancements from these secondary businesses. It’s a very simple “trickle-down” progression which need not have a logical end as long as we can establish interconnectivity between the various elements of the economy. Of course there will be spillage in that our Scottish economy will not be hermetically sealed! But the fiscal drivers will be domestic.

This type of scenario is what has driven the Irish economy along. Don’t put all the blame on the boom and bust of the property bubble and the economic crisis as that was a universal phenomenon which just happened to be exacerbated in the Republic because, to a great extent, much of Ireland was starting from a far lower base than most of Western Europe. The CT rate of 12.5% has been a huge success story with so many foreign companies flooding into Ireland to take advantage of a light fiscal touch and an educated workforce. There is also a fallacy abroad about Ireland in terms of CT which needs to be cleared up. The 12.5% rate only applies to trading income – non-trading income is taxed at 25% so Ireland is an unsuitable place to park so-called offshore assets as there is no advantage to doing so. Or more precisely there is no advantage to the Irish state as this type of income does not offer trickle-down benefits to society.

There are plenty of models out there in the EU which are attractive and pro-business. The Estonian model gets a lot of mileage for its 0% rate on undistributed corporate profits. But there is also the 5% flat rate on profits under ca. €290k for the so-called Lithuanian "micro company" – a very competitive small business vehicle. This model is already being marketed beyond Lithuania’s borders as a tax-efficient holding for businesses with a quasi-transnational footprint – crucially once a business has been taxed for CT in one member state of the EU then there is no remaining liability for further taxation in another member so paying 5% in Lithuania is a better choice than some other jurisdictional levies. This suits Lithuania today.

Luxembourg has several attractive business formation models and it's no accident that an increasing number of multinationals lodge their IP there with a sub-6% income tax rate on royalties arising. It's a hoot when HMG and HMRC squeal about Luxembourg VAT on things like Amazon but at the same time fail to tax the big boys at anything like statutory rate – just witness Pfizer's eagerness to become UK domiciled. Luxembourg has cleverly switched its company regulations in a rather fluid manner as EU legislation develops and will undoubtedly continue to do so. For anyone not familiar with Luxembourg Ville, a huge financial zone has been built in an entirely new part of the city on the plateau of Kirchberg. This is a purpose built quarter which houses a great many international banks, accountancy firms, auditors and insurance companies along with conference centres, EU institutions and retail centres. All of this in a zone that conveniently reaches towards the airport.

Maltese corporate taxation could teach us a thing or two with what is, at face value, a high CT jurisdiction – 35% – but with rather generous rebates for legitimate operators that can be reduced to a very palatable 5%.

Personal Income Tax

If there is one area of government policy that is guaranteed to get virtually everyone excited it is personal taxation. This is an area fraught with dangers at election time for any potential leader of HMG and many a UK General Election has been won and lost on personal taxation policy.

But, in principle, PT need not be such a thorny issue. It is the very complexity of the system as laid down by the Chancellor of the Exchequer and administered by HMRC that creates such electorally charged issues.

A flat rate PT regime as a jumping off point for iScotland would be a very pleasant culture shock to my experience. There are various schemes in operation throughout Europe and although some are very attractive such as 0% in Bosnia we need to have some form of realism about what taxation is actually collected for. If we wish to have a healthy state sector then we require healthy input and that starts with realistic PT.

If a future Scottish Revenue Service (SRS) would pursue a fundamentally flat rate scheme it would offer so much clarity but the key point to the layman would be that when an employer tells you that you will earn £X per week or per month then you will be able to calculate with some degree of certainty what your take-home will be – something quite unimaginable with HMRC.

This is an area of taxation where clarity should be welcomed by all-comers. As Iain suggests it is the accountants who are the winners with the opaque regulations of a tax system that runs to 11,000 plus pages.

Then the flip side of the coin might be offered.

Are you sure that your accountant is as well versed in absolutely up-to-date HMRC regulations as he needs to be to offer you a full service? I am not sure if that question can be universally answered with a “yes” by all of us. I had the personal experience of a fairly young and generally go-getting accountant who was on the staff of a leading Aberdeen law practice a number of years ago. He was well versed in saving clients’ money through judicious financial planning of estates and trusts. But at the same time he was costing his own employer thousands of pounds every month, as was pointed out to him one evening, because he was not up to date on the latest allowances for company cars.

The silly stuff is in the detail and that is the largest part of the problem.

So, as a wise man once said, KISS – Keep It Simple Stupid!

National Insurance

We don’t look at NI with anything close to the same keen gaze as we do other forms of deductions. It’s just there. It comes off before tax and that’s that. It doesn’t seem to hurt so much. But NI is just a PT by any other name. Only in this case it looks after a narrowly defined area of benefits which are closely attached to the person such as pension, healthcare, unemployment cover etc. Therefore it is impossible to calculate a gross rate of deduction without factoring in NI. In some jurisdictions NI is not levied separately and the PT figure is indeed the gross deduction but that varies.

Whilst I would argue for flat rate PT I would, conversely, argue for a sliding scale of NI. This proceeds from the premise that some of the different elements in the NI payment might be permitted to be comparatively less steeply increased but pension provision can never be enhanced enough if the individual concerned can afford the contribution. Private and employer pension provisions are other beasts entirely but an affordable and properly funded state pension to the individual can be something new that iScotland gives as a reward for a productive working life, something that is impossible to imagine with HMRC and the DWP at the helm.

Inheritance Tax

As the author of the 2010 Conservative Party Manifesto and the Chancellor of the Exchequer-in-waiting George Osborne made an explicit pledge to raise the threshold for Inheritance Tax (IHT) to £1 million in the UK. He reaffirmed later in 2010 that the increase would take place “in this Parliament” but despite that this promise has completely disappeared without a trace.

IHT is a tax on death. It is a tax imposed on the survivors of those people who have done reasonably well in life and salted enough away to leave something to their kids and their grandkids. It’s not adding insult to injury, it’s adding insult to death!

This is another political football that is kicked around at Westminster election time but the net result never seems to be anything too radical and the threshold has crept up well below the numbers indicated as appropriate.

Employment Costs

The primary employment costs are similar to those as described under NI, namely pension, healthcare and unemployment contributions although this can and does vary from one country to another.

The levels of employer contribution can be fairly light in some tax regimes and the flip side of Estonia’s 0% CT on undistributed profits is a social security contribution of 33% over and above an employee’s gross income. As an example an annual gross salary of €10,000 paid to an employee in Estonia would see the employer actually make gross payments of €13,300. Other examples of employment costs are 31% in Hungary and 23.75% in Portugal.

So that’s the main components of direct taxation. From the point of view of indirect taxation we should consider mainly VAT.

Value Added Tax

The case of VAT in the EU is a little different from the main direct taxes. Variability of rate of VAT is limited in that the lowest regular rate is 15% with reduced rates available in various sector down to as low a rate as 0%. The application of reduced rates and the sectors in which they can be levied are dependent upon negotiation but as things stand currently the UK has the highest number of zero-rated categories.

The current issue of using low VAT jurisdictions for e-business and mail order invoicing purposes, such as Amazon out of Luxembourg, is set to change soon with the burden of VAT becoming fixed by the address of the purchaser and not the vendor. So there will be no accrued advantage in operating from a low VAT base as the invoice will have to reflect the relevant VAT rate at point of delivery of the goods. For instance a package of new books shipped to Ireland from inside the EU will attract a 0% rate commensurate with the Irish exemption but the same package delivered to Denmark will attract a rate of 25%.

These new regulations will iron out a few bumps in the VAT system and point companies squarely towards CT advantages. So we can look forward to far less VAT-vectoring in transnational trade within the single market in the future as there will be no distinct advantage unless the local VAT rate alone offers justification for business location.

A Scottish Revenue Service

I am convinced that the future SRS should be a fairly light touch organisation. By this I do not mean that they should be lax with regulation. What I do mean is that the level of transparency should be such that only a fair-to-middling level of accounting competence would be needed to be able to see all businesses report to full satisfaction with no need for clarification and cross-referencing with the SRS.

When the taxation regime is built in a fundamentally simple and straightforward manner with concrete rules and minimal exceptions then the possibility to be “creative” disappears. If the rules are foolproof then even a fool should be able to get it right by definition. Also if errors are made then the offender should be admonished or punished accordingly in an “across the board” manner.

Potential Tax Model for iScotland

What follows now proceeds from what I have written above and is only my own personal model for a taxation structure in iScotland. This bears no relation to the Scottish Government’s White Paper, Scotland’s Future, and can be ripped to shreds at will if anyone so desires. I’m not going to try to tackle Capital Gains Tax and the issues of Excise and Duty payable on fuels, tobacco and alcohol etc. These subjects will be returned to in later separate articles.

1. Corporate Tax – I see the need for a benevolent CT system to attract foreign investment and jobs to our country. I also see a benevolent CT regime as an enticement for undecided parties to reaffirm their commitment to Scotland as a place to do business. To this end I would suggest something of an amalgam of the examples that I described earlier.

I would take the Lithuanian micro company model and impose it as a workable analogue across the board. Let all companies have their first £250,000 of profit  – distributed or otherwise – taxed at 5%. Further to that I would impose a continuing CT rate at 5% above £250,000 on undistributed profit without ceiling and have distributed profits taxed at a rate of 15%.

2. Personal Income Tax – We need to be realistic in our assessment of what is both viable and fair in the PT rate for iScotland. I would favour a flat rate with a reasonably high initiation point. I suggest a taxation threshold of £15,000 with everything under that level of income being 0% rated. All income above £15,000 should be taxed at a flat rate of 22.5%.

There is the question of allowances for married couples or civil partnerships. I would replace this with a unique “pooled allowance” which might permit any two permanently interlinked individuals to enjoy a joint taxation threshold that is substantially higher than the single person’s allowance. This pooled allowance could offer a 0% taxation threshold of £25,000 across the two incomes in a relationship. This may not sound astoundingly generous but if the scenario sees, for instance, one person working and the other staying at home to look after children then the working partner will enjoy a further £10,000 of income at a zero rate which, if the salary is equal to or more than £25,000, will equate to £2,250 more in the pocket every year.

Furthermore I would offer a revolutionary incentive to those on a pension – I would make pensions exempt of all PT for a period of at least 10 years. That’s right, completely abolish taxation on pensions for the time being. In the intervening period there can be a debate on how best to address the issue of taxation on pensions but I would favour a pledge of a high threshold and shallow entry such as nothing taxable below £30,000 and even then only at a rate of 5% with a step up to 10% at £50,000. The vast majority of pensioners will be unaffected by any return to taxation and those who will eventually be taxed will be those best able to afford the contribution. As an example someone with a pension of £40,000 would only pay an annual amount of £500 in PT and in the case of a pension of £60,000 that figure would be £2,000.

3. National Insurance – As I mentioned earlier I would tilt NI contributions in the direction of pension provision, but that should not be at the expense of other sectors that the payment is intended to provide for. My base NI threshold would be at £12,000 – let the first £1,000 every month be free of contribution. At £12,000 the rate of NI would be 4%. At £15,000 when PT kicks in I would see NI rise to 5%. Then at every £5,000 increment from there upwards I would add 1% to the NI rate – 6% at £20,000, 7% at £25,000, 8% at £30,000 etc. – up to a maximum contribution rate of 15% at an income level of £65,000 and above. All contributions up to 8% would be split as required between the different sectors that NI is designed to provide for but anything beyond 8% should be explicitly ring-fenced as supplementary state pension provision. The entry to this NI system is not nearly as steep as the UK version. The cost will dig deeper but only on the basis of affordability.

The current UK system kicks in at an income level of £153 per week or £7,964 per year at a rate of 12% but then drops to 2% at a level over £805 per week or £41,860 per year. Unfortunately that level of NI contribution sees both too steep an entry point and too shallow a rate reduction. The earner is penalised too abruptly at too low an income but when he or she can most afford it the rate is relaxed. This will always create deficits in the key areas of public spending that are most critical to us all at our times of maximum vulnerability – old age, illness and unemployment. A graduated and increasing NI burden has the potential to secure better provision for our times of need,

4. Inheritance Tax – More revolutionary stuff here with IHT and follow the lead of Australia and New Zealand – scrap it completely. It can fairly easily be argued that the means of collecting IHT would be at least as costly as the actual tax take. Scotland is not the Home Counties after all and the number of qualifying estates is relatively low by comparison. It can also be fairly easily argued that by having accumulated an estate sizable enough to attract IHT then the person concerned was likely to have been taxed more than adequately whilst building that estate.

Therefore remove IHT completely and do not tax the dead!

5. Employment Costs – This is a difficult one as we need to be fair and equitable to society in general without scaring off employment opportunities. At the same time we need to recognise that there must be a reasonable level of contribution from an employer. In the tax year 2014/15 in the UK the rate is 13.8% for all earnings above £7964 with a few exceptions. Bearing in mind the CT benefits as specified above I would levy a flat rate of employer NI contribution at 20% from an entry level of £12,000 – the same threshold as for employee NI contribution. This is certainly higher than the existing UK system but is more than compensated for by other allowances in the general system.

6. Value Added Tax – VAT is of course a transactional or consumption tax that is indirectly collected and disbursed along the supply chain of products until eventually being levied upon the end user. The system is fairly standardised within the EU in terms of its administration although not, as pointed out earlier, regarding its levels. I would argue for the lowest headline rate of VAT as permitted by the EU at 15%. I would also argue for the retention of the UK’s zero-rated sectors on what are regarded as essential items. The reduced rate can be as low as 5% and that would seem to be a reasonable level.

Summing Up

So that’s where we are at just now and that’s where I see us going in the near future with iScotland. We should aspire to a highly transparent and completely linear system of contributions which create scenarios that are easily read by the contributor.

When it comes to arguing the features and benefits of such a system it is very important to treat this model as a whole and not to separate out the different components as doing that simply creates obfuscation. Westminster has skilfully managed to separate employment costs from the taxation equation and stand them up as separate and problematic issues, or more accurately, in my honest opinion, the Scottish Government has not offered a persuasive, inclusive narrative for reconciling taxation and employment costs in a joined-up manner. As Westminster drags each issue away from the body of the whole it is quite easy to interrogate one element as unsustainable but that is all about contextualisation and the boys from London are the undoubted experts in this form of misleading subjectivity.

I think part of the blame for this is not through any fault of the Scottish Government getting hauled off-message and nor do I think it is because of a lack of consideration of the issues. Instead I feel that it is in some part down to John Swinney’s more cerebral approach to his portfolio. He’s not a Bullingdon brawler like George Osborne or as combative as Ed Balls. Instead he attempts to argue reasonably and rationally with no aggressive attempt. By trying to tell the truth in an inclusive and rounded manner John Swinney has not made the sound bites that the media crave and the electorate hang onto. This is not a criticism of the Finance Secretary as he has been singularly successful in getting to grips with the big picture of Scottish finances with one hand tied behind his back and the other in a boxing glove!

So maybe I need to contradict myself here. Maybe we need to cherry-pick some of the good stuff out of the whole and rub it into the faces of the media until a little of it sticks and they pop their heads out looking for more. Whatever it might be it should create a media and Unionist feeding frenzy. But that is good. Then we can bring in the heavy hitters of Alex Salmond and Nicola Sturgeon to underline the interconnectivity of the entire system.

When Michelle Mone and her ilk bump their gums there is a lot of irritation but some uncertainty as to why she is totally wrong. She is NOT totally wrong. Yet! The inclusive narrative has not been presented coherently. When it has been presented coherently then we can all be certain that she is the stooge that we feared all along.

I would ask everyone to be interactive here and offer as much criticism as you like. The model outlined is only my model. Tell me how to improve it!

The CyberNat is Dead - Witness the Rise of the CyberNOT!

For such a long time the CyberNat has been regarded with disdain, even disgust, and I am no great supporter of anonymous online abuse in any form as that is utterly gutless.

However we are all aware of the far more poisonous mirror image of the the CyberNat - let's call this particular animal the CyberNOT.

Every pro-Yes article that is published attracts the CyberNOT troll with a vengeance and the level of debate drops to sub-basement level immediately. The CyberNOT is far more insidious than anything I've come across in the mainstream media and, frankly, is almost Talibanic in its quest to obfuscate in any way beyond reason. The quasi-religious zeal in which Yes arguments are attacked and scorned is beyond anything that I have witnessed or been party to.

I bring this subject up as I have found myself the target of CyberNOT abuse simply for having the temerity to express an opinion or two in an open and transparent manner on a public forum. Cut-outs - anonymous temporary Facebook accounts - will happily send obnoxious private messages and then disappear as fast as they arrived on the scene. Brave behaviour.

There are other silly little things as well which are not necessarily conducted by cut-outs. Last October my Yes Tallinn account was messaged by someone with the following:

"What is your real interest in Scottish Independence? My husband works much of the time in Estonia and has not heard of you." 

Well, let's set out a few simple facts. Estonia is a country the size of Switzerland. Tallinn is a city with the population of Edinburgh, Bristol or Belfast. Is it incumbent upon me to go out and make myself known to every foreigner who turns up in the country? As a Scot I am familiar with the supposed tiny nature of my own country: "Oh you're Scottish? You must know Jimmy. Where's he from? Scotland of course. I don't know the town but it's Jimmy. You must know him. Red hair..." Sound familiar? No, I do not hang out in the ex-pat bars in the square mile of Tallinn's Old Town and I visit that part of the city probably less than half a dozen times a year. It's like imagining that someone who lives in Edinburgh MUST spend all their time down the Grassmarket if they would really exist to the wider world.

As it was this particular messager was not abusive, but doubting someone's motives or ambitions simply because her husband has not heard of me is less than substantive as an argument. I am not going to name that messager as that is a pointless exercise which stoops as low as the CyberNOT  Instead I openly engaged that person with a selection of information but sadly (or predictably?), up to now, she remains silent.

So brothers and sisters of Yes, I implore you to be lucid, transparent and reasonable in all that you write, disseminate, or otherwise share. Keep it clean and keep it honourable. Engage the CyberNOT  But always, always, always be better than the CyberNOT  He is scared, his arguments are built on sand, his only defence strident voices and he will always try to shout you down. We are better than the CyberNOT  We have the arguments to win the battle. It is for this very reason that the CyberNOT is on the rise.

I'll say it again and again until I'm blue in the face (saves on saltire face paint, eh?) keep it clean. Keep it concise. Don't invent stuff just to sound clever. State your source whenever possible. Remain reasonable, even in the face of the CyberNOTic Taliban, If you are at a loss you could do a lot worse than go back to first principles and read McCrone again - that will re-energise you.

Get out there and engage and always remember that if we stay out of the gutter then we will always be better than the CyberNOT. Always. 100% of the time.

The face of intolerant Scotland - public enemy no.1! Aye, on the left...

But if that's not enough to bear I hear only this morning that Iain Lawson has had a run in with the uber-CyberNOTs – the CyberStasi. I'll leave it him to explain:

"Just been "moderated," polite word for censored, by the Herald for merely pointing out that the two academics involved in the Treasury document have now accused the Treasury of grossly misrepresenting their work and that therefore the Treasury paper can no longer be classified a serious research paper and should now be classified as propaganda and that responsible media organisations, like the BBC and others should report it as such. Such is life in Soviet Scotland these days. Postcards from the gulag later."

This must be seen to be rather sinister as Jim Naughtie openly mentioned this on the Today programme on Radio 4 this morning and although probably not as incisively as Iain he laid it out that there would be refutation and a case of "he said, she said." Why would the Herald need to try to gag something which is already out in the open? 

With 4 months to go Westminster has blinked...

The subtle change in the narrative was almost imperceptible. The new weasel words sounded just the same as the old weasel words emanating from the unelected chamber of the privileged.

But it was there. Undeniably it was there. And all of a sudden the genie has been released from his bottle.

The House of Lords was finger-wagging about how Scottish MPs would not be permitted to take part in matters relating to the post-referendum independence settlement.

Just step back for a moment and consider that again. The Lords considering scenarios following a Yes vote on September 18th.

This is completely and utterly epoch-making. The narrative has changed irreversibly.

The Lords go on to point out other matters of legality between the point of a Yes vote and the preferred date of independence, 24th March 2016. Further to that they stress that the rUK government would have no obligation to meet that timetable if it was not in the rUK's interests to complete negotiations by that date.

Wow! This is sensational stuff.

OK, you may say that it is dry, procedural, yawn-inducing nonsense which as Angus MacNeil MP rightly points out is offered up by an, "undemocratic anachronism stuffed to the gunnels with over 800 peers of the realm who answer to no electors and are often there because of privilege or patronage."

But the key point here is that the undemocratic anachronism has seen something of the writing on the wall and realises that it is the organ of state that has to start considering the implications. Westminster blinked first.

This is the UK's upper house openly discussing the terms of what will or will not be acceptable should the "unthinkable" happen.

Westminster inflicts more T-O-R-T-U-R-E

As I say, the genie's been well and truly released from his bottle.

Let's go back barely 6 months. Last Christmas could you have imagined Parliament discussing procedural matters following a Yes vote before a single ballot has even been printed? Not on your life.

But why? Is it because the House of Lords is a reasonable and democratic institution which always attempts to seek out the considered wills of the constituent parts of the United Kingdom? Is it hell!

Or have they got the wind up? Was that secet poll result so damning that there was no alternative other than to consider the distasteful concept of a split?

We may never know the true answer to that but it is, at the same time, interesting to note that this unelected chamber is keen to extinguish the mandate of elected Scottish members of the House of Commons.

Angus MacNeil again, "To be lectured by them about timetables and for democratic processes is something that could only happen in Westminster.

"It will be elected representatives who will lead Scotland's transition to independence – not some elite club whose members can still turn up for just half an hour's work and get a £300 daily allowance."

But whether or not the Lords actually have the right to rule, advise, pontificate, finger-wag or otherwise it is not what they actually do that matters, it is that they have done anything at all that marks the sea-change. In one fell swoop they have recognised, without really realising what they have done, that the game's up and the clock is now ticking towards 10pm on September 18th. I'll be on Rose Street. Where will you be?

As for political dynamite this week, David Cameron's visit to Scotland to tell us all how lucky we are and Dougie Alexander's intervention to tell us all how lucky we are – completely consigned to the back-burner when we have the lawmakers of the Lords stumbling into this minefield all by themsleves.

An almost imperceptible shift but it's done now and they can't go back from here. The genie's out and he will cause mischief.


P.S. I had to chuckle at the BBC News website's reporting on the House of Lords matter when they stated that, "This would prevent MPs who represent Scottish seats negotiating for the rest of the UK on the terms of independence, scrutinising the UK's negotiating team or ratifying a resulting agreement, the committee argued. Those affected would include politicians such as Danny Alexander, the Chief Secretary to the Treasury."

Aye, not past next May though!

What are little boys made of?

What are little boys made of?
What are little boys made of?
Slugs and snails and puppy dogs' tails,
That's what little boys are made of.

What are little girls made of?
What are little girls made of?
Sugar and spice and all things nice,
That's what little girls are made of.

What are No voters made of?
What are No voters made of?
Austerity,
Zero hour contracts,
Part-time jobs,
Food banks,
EVPs,
Benefit cuts,
Exorbitant utility prices,
Highest petrol prices in the EU,
20% VAT,
The Bedroom Tax,
The democratic deficit in Scotland of an unelected Tory government,
David Cameron hiding polls that tell the truth,
Child poverty reaching heights not seen since the Victorian age,
Standard Life coming out with the same crap they came out with in 1979 to scare people,
A Chancellor who lies through his teeth at every turn,
The natural resources of Scotland being used to make billionaires in London,
Tax avoidance schemes made to benefit the big corporations being let off with billions of tax so Tories can sit on their boards,
Inheritance tax threshold frozen as it was only a Tory campaign promise to raise it after all,
The likelihood of another coalition government but this time between the unelected UKIP and the unelected Tories in Scotland,
Pensioners freezing their butts off in winter because Westminster doesn't care,
The Royal Mail being sold to the Chancellor's buddies for a fraction of its true value with 85 % of MSPs opposing it in Scotland,
Nuclear weapons based less than 20 miles from our largest city,
That's what No voters are made of.