Assume every tax rate except for the “personal allowance” was increased by 1% to fund free train travel. That would mean someone at the median annual income of £38k would pay about £254 extra tax per year ((38000 - 12570) * 0.01)
Would you be in favour of this?
Some numbers for context:
The government raised £17.1 billion in 2024.
The ScotRail revenue for 2024 was £351m (page 17).
So to offset the cost of tickets, the government would have to raise £351m which divided by the 2.46 million people in work would be an average cost of £140 extra per person collected per year, so I believe 1% may be able to pay for it comfortably, and even improve the service, to compensate for the extra demand on free travel.
Laffer curves are likely nowhere near relocation levels currently. It’s a red herring mostly that right wingers like to point to. With no evidence we close to a peak
It is hard to argue that trains trump healthcare and education though
The laffer curve is a real phenomenon. I won’t die on the hill that it would happen in this case but it’s still something to consider when raising taxes.
Agree that people making all the noise about relocating haven’t actually done it. Was a bad example! People doing things like increasing their pension contributions to avoid going over 100k and losing their tax free allowance is a more concrete example.
Real phenomenon in economics! I should have stipulated that it’s as real as anything else in economics is - all of it is theoretical.
No bad thing to see people investing in their pensions. Pensions are the bedrock of investment in the UK economy, far more important than mortgages imo
Yeah 100% it’s just an action that might result in the tax take being lower than expected