SCOTLAND’S largest trade union body has set out proposals they say could raise £3.7 billion for public services - including a wealth tax and private jet levy.
It comes as local authorities set out their demands ahead of the upcoming Budget.
The STUC published its 2023 tax report on Sunday, which they say would raise the extra £3.7bn each year by using Scotland’s existing powers. This would include introducing a wealth tax, replacing council tax and introducing a “super tax” on private jets.
Meanwhile, local authority umbrella body Cosla demanded fair funding to be set out in the Scottish Budget, due to be announced on Tuesday 19 December, after First Minister Humza Yousaf announced a council tax freeze at the SNP conference in October.
Finance Secretary Shona Robison has warned of incoming public sector workforce cuts due to budget constraints facing the Scottish Government.
But the STUC have argued that their latest proposals could fund 82,000 public sector workers.
The report Raising tax to deliver for Scotland set out several reforms to the tax system that could be introduced as early as 2024, raising just over £1.1bn.
This would include £779m from income tax reforms, £240m from increases to Land and Buildings Transactions Tax, £56 million from increasing the Additional Dwellings Supplement and £30 million from increasing Scottish landfill tax.
The STUC also set out longer-term reforms - which they say could be in place by 2028 if ministers began the legislative process in 2024 - that would raise almost £2.6bn per year.
A wealth tax would boost Scotland’s coffers by £1416m and would be based on wealth in a household rather than that of an individual. This would include property wealth, pension wealth, and physical wealth such as household contents and valuables, such as antiques, artwork, collections, or vehicles.
The annual levy would equate to 0.5% for those with a wealth of between £1m and £2m, 1% between £2m and £5m, and 2% above £5m.
Elsewhere, replacing Council Tax with a Proportional Property Tax would raise £783m, according to the report.
This would mean households would pay a percentage of the value of the property each year, rather than the current banding system, which is based on the value of the home on April 1 1991.
The group also suggested scrapping the small business bonus scheme for Non-Domestic Rates and instead replacing it with a targeted scheme for Fair Work employers, raising £200m.
Introducing a Land Value Tax for commercial land could raise £100m, a frequent flyer levy £50m, and £25m from a super tax on private jets.
The private jet tax would introduce a “super rate” of Air Passenger Duty (APD) for flights, 10 times the current rate, of £780 per journey. As around 8% of private jet flights depart from Scotland, this would account for the £25m.
The Scottish Greens have previously called for a £1000 APD rate for each private jet flight, which would raise between £50m and £100m per year.
A carbon emissions land tax could raise £13m, with £18m brought in from increasing the Scottish Aggregates Levy.
STUC general secretary Roz Foyer said that the report showed the Scottish Government has “the power to make a real difference to our communities”.
She said: “The Scottish Government must step up for Scotland. It’s clear that, with one foot out the electoral door, the Tories are hellbent on saddling any future UK Government with devastating public sector cuts.
“We can choose a different path. It’s within the powers of our parliament - through income, land and additional dwelling taxes – to raise an initial £1.1 billion from April next year. Coupled with longer-term wealth, property and aviation taxes, the Scottish Government can raise another £2.6 billion."
Foyer (below) said public services in Scotland "need investment more than ever".
"It would be a chronic dereliction of duty for government ministers to sit back and let workers suffer Tory-inflicted austerity," she added.
“They must rise to the challenge. For the sake of our workers, communities and public services, there is simply no other option.”
It comes as Cosla president Shona Morrison called for adequate funding ahead of the Scottish Government’s Budget announcement.
“Sadly, our reality right now is an extremely challenging financial climate coupled with years of real-terms cuts to council budgets while additional policy commitments are continually being introduced,” she said.
“If this situation doesn’t start to improve soon, it will mean tough choices being made and the many essential services councils currently provide will cease – services that not only address problems on the ground, but actively prevent bigger issues occurring down the line.
“We have been clear that cutting frontline staff isn’t the answer.”
Cosla have set out that local authorities will need a £14,377m commitment in the Budget to “stand still”, with the council tax freeze costing as much as £300m.
