Let’s start with my favourite Chicago politician and the small matter of the next US Presidential election.

I was interested to read this week that President Obama is considering a form of “minimum taxation”.   The plan seems to be if you make more than $1 million a year you should not pay less than 30 per cent in taxes.  In addition if you earn more than $1 million a year you will not be allowed to claim any tax relief or deductions.  On corporate taxation no American company will be allowed to avoid paying its “fair” share of taxes by moving jobs and profits overseas.  Again multinational companies will be liable for a basic minimum tax.  I wonder if we will see our politicians thinking along similar lines in the near future.  I suspect that we will.

Now to the independence and fiscal powers debate.  Two major developments this week. Firstly sources close to the Prime Minister are reported to have said: “that a substantial increase in financial powers for Holyrood is not an option if Scotland wants to remain within the United Kingdom.”  If the UK Conservative party sticks with this line in the sand then how will those who support “devo max” or “devo plus” vote in 2014?  Will the Liberal Democrats and the main UK opposition party continue to support this policy?

Only time will tell as far as these questions are concerned.  One thing is though certain and that is the UK Government will face opposition on this point.  This week groups from the voluntary sector, churches, trade unions and the business community have formed a coalition to explore the possibility of a “middle-ground” option which is short of independence.  This group is termed “civic Scotland” and has the support of two think tanks Reform Scotland and the Centre for Public Policy.  For completeness sake I should mention that I am a former trustee of Reform Scotland and that I was one of the authors of Reform Scotland’s fiscal power papers.  I am though not involved with this group.

I was surprised that more was not made of the new statistics produced by HMRC this week.  UK tax receipts up to January 2012 show that total tax revenues in the 2010-11 fiscal year very nearly recovered to their pre-recession 2007-08 level and are set to be substantially higher in the current 2011-12 tax year.

Now to something we in Scotland are going to have to consider as tax powers are devolved to the Scottish Parliament.  It is easy to suggest a new tax.  Recent examples include a “bed tax” for Edinburgh.  Another possible new tax is the so called “bag tax”.  It was reported this week that Northern Ireland is to introduce such a tax from April.  Wales introduced a similar tax last year and the Republic of Ireland has had such a tax since 2002.  The Scottish Government is presently consulting on this issue.

As I said it is easy to suggest a new tax.  It is harder to explain what that tax is meant to achieve.  That should always be the starting point.  Are we looking to increase tax revenue or change behaviour or possibly a bit of both?  When environmental taxes such as aggregates levy and landfill tax were introduced the politicians struggled to answer this question.

I would also expect an explanation as to how the tax will be collected, the cost of collection and who carries that cost.  Any claim as to potential revenue also needs to be looked at closely and also put into context.  Most taxation revenue comes from just a handful of taxes.  Many of the UK’s minor taxes produce a relatively small amount of revenue.

Any new tax should also have a review date.  This ensures that any claims as to revenue or the cost of administration can be checked within a relatively short period of time.

Now to an update in the Scotsman on Edinburgh airport’s so called “kiss and fly” tax.  A total of 15p of every £1 generated by the charge for dropping off passengers beside the airport terminal is being channelled into its environmental fund.  The article can be found here.

Now to business rates and an excellent piece in the Scotsman newspaper.  The Scotsman reports that an unprecedented number of firms in Edinburgh have demanded reduced business rates as they struggle with a weak global economy and local difficulties such as tram works.  The article can be found here.

Now to Europe.  I was not surprised that President Sarkozy has decided to introduce a French financial transaction tax in August.  Will he still be in power then is of course another question.  The plan is to unilaterally impose a 0.1% tax on financial transactions.  The UK Prime Minister’s reaction was as expected.  Of greater interest is whether other European countries follow Sarkozy’s lead.

I have been following the Harry Redknapp trial with interest.  It is alleged that he received undeclared payments via a Monaco bank account from his former boss at Portsmouth Football Club.  Reports such as this one from the BBC News website, found here, make fascinating reading.

It seems that the Chief Executive of the Student Loan Company has his salary of £182,000 salary paid via a company and without tax being deducted.  The article claims that both HMRC and HM Treasury were aware of this arrangement which allows Ed Lester to pay corporation tax of 21% rather than up to 50% income tax on his earnings.  You have to wonder if the people who approved this arrangement have any sense of what is happening in the real world just now.  This is an excellent piece of journalism from the Guardian and the article can be found here.

Finally to more serious matters.  Good luck to new Scottish captain Ross Ford this weekend.  No pressure!

Have a good weekend.