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Could devolved tax powers be coming to your region?

The dust may still be settling on the Scotland independence referendum, but its legacy – the call for more devolved tax powers – is already making itself known.

One of the biggest selling points the ‘Better Together’ campaign blokes ran on was offering Scotland devolved tax powers if the vote came down to stay in the union. Now that the No votes have been tallied there’s been demands for Westminster to live up to its promise – and that means that there could very soon be a completely separate tax rate for Scottish residents.

However, this newly promised devolution has ignited the imagination of the English. South of the border, a new research study conducted by the Institute of Directors found that more than two out of every three managing directors wouldn’t mind seeing the same thing begin to happen in other areas of the UK – more specifically there’s a large push for devolved tax rates on a city-by-city basis.

Now I’m not going to sit here and say that instituting such a new programme would be easy. Obviously it would e a rat’s nest of problems to unravel, and it would easily mean that no one would be able to do their taxes without the help of some very well-educated contractor accountants that can navigate this new economic landscape. Not only that but if the entire UK ends up with devolved taxation on a per-city basis there could be some serious competition as far as where people want to live and work.

This could cause some serious problems. Imagine if local authorities end up in a competition ‘price war’ with one another, driving their income taxes down lower and lower to attract new residents. Sure that might be good for anyone who wants a low tax burden, but what happens when these tax rates fall so low that the revenue each city collects isn’t enough to keep things running smoothly? Why, they’ll have to raise taxes – and risk a mass exodus from the region to the next-closest one with lower taxes.

Don’t get me wrong – I’m not a fan of Westminster making country-wide decisions, and I’m glad that Scotland has some devolved powers coming its way. But I also think that too much devolution could end up disastrous for us all.

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