Socialists reveal tax plans

Tommy Sheridan is the party's only MSP at present

Proposals to replace council tax with an earnings related tax have been unveiled by the Scottish Socialist Party (SSP).

The Scottish service tax would be an income-based levy which would increase the top rate of tax for high earners from the current 40% to 60%.

At the top of the scale, earnings over £90,000 a year would be taxed at an additional 20%, while incomes below £10,000 would be tax exempt.

Party leader Tommy Sheridan said the change would leave 16% of Scottish households worse off but lessen the tax burden almost 78%.

The policy is set to be a major theme for the party during the election campaign for the Scottish Parliament in May next year.

SSP local tax plans

All income under £10,000 would be exempt

Income between £11,000 and £29,999 would be taxed at 4.5%

Income between £30,000 and £50,000 would be taxed at 15%

Income between £50,000 and £90,000 would be taxed at 18%

All income over £90,000 would be taxed at 20%

Mr Sheridan claimed that under the present system, Stagecoach founder Ann Gloag, Scotland's richest woman, who lives in the 24-bedroom Beaufort Castle in Inverness-shire, pays £1,878 in council tax.

"Helena Duffy, a lone parent who earns £170 a week as an ancillary worker in Stobhill Hospital, pays £760 in council tax for a two-bedroomed 14th floor high-rise flat in Milton, Glasgow," he said.

"In effect, Ann Gloag pays less than two and a half times more than Helena Duffy, even though she earns at last 100 times more."

The list MSP for Glasgow admitted that the policy would leave 16% of Scottish households worse off but said that 77.7% would benefit with about 6.3% experiencing no change.

The aim, he said, is to put "£20 to £25 a week extra into the pockets of the low paid and pensioner households".

Devolution policy

Under the proposals, there would still be an additional council tax charge for second homes but the scheme would not replace the main income tax.

Mr Sheridan said the policy could be introduced under devolution.

But he also admitted that it could result in Westminster "clawing back" up to £250m which is currently paid to Scots through the benefits system.

The SSP is hoping to see its support increase

The Scottish Socialist leader rejected claims that higher taxation of more affluent people would lead to many leaving the country.

He said only "1% or 2%" would actually move as most people's jobs depended on them actually living in Scotland.

Full details of the new policy were formally announced at the City Chambers in Glasgow on Monday.

The party plans to hold a second briefing next week to set out its other big election issues, including water charges.