Damages caused by current taxes are called ‘deadweight losses’. Nobel economists claim £2 is lost to the economy for each £1 of tax raised in Scotland today. SLRG uses a conservative estimate of £1 of deadweight losses per £1 of tax raised from sources such as Income Taxes and VAT.
Scots need to know the level of deadweight losses their government chooses to inflict.
Parliament will command an assessment of the deadweight losses inflicted on Scotland by Acts of Parliament at both Westminster and Holyrood.
Without this information, the performance of Parliament cannot be objectively assessed, and elected representatives cannot be held accountable. Parliament must enact legislation which orders that, on an annual basis – when the Budget is submitted to the Scottish Parliament for scrutiny – the Cabinet Secretary for Finance will publish revised statistics on the increase or decrease in the deadweight losses arising from proposed changes to tax rates.
Armed with this information, full evaluation of the AGR fiscal instrument and how it compares with alternative strategies can be undertaken. At which point Scots may choose to mandate the reconstruction of their public finances.