JOHN Swinney, the finance secretary, hit back yesterday at opposition claims that average couples would be hundreds of pounds a year worse off under his local income tax plans.
The Tories claimed at the weekend that a household with two people working full-time and earning the average wage – giving them a joint income of £53,290 – would be £289 a year worse off under the local income tax than they were under the council tax.But Mr Swinney said the Tories were wrong to use the mean (average) figure for income and should have used the median (middle) figures, because this was more accurate.
Oh yes - the mean and the median. How many of us remember the difference? Or ever knew it in the first place? And, in this instance, which is the correct one to use? Does anyone care?
5 comments:
I am sad enough to admit that I do actually care.
The median is a better statistic to use as it discounts the super-rich in a more reasonable manner than the mean.
Say you had 10 people. One earned £10k a year, 8 of them earned £40k a year and one of them earned £20m a year.
The average wage would be £2,033m.
The median wage is £40k.
Which do you think makes more sense?
Lies, damn lies and statistics. But I'm with the SNP on this one...
Exactly Jeff. The 'average' is used by the Tories to at least imply 'the biggest group'.
This type of average is the median, rather than the mean.
I stand corrected. (Though if I were the guy earning £20 million, I would not be happy about having to pay £600,000 in local income tax ...)
I don't know, I think it would be a drop in the ocean really, a drop sitting snugly against your lovely big yacht!
What about all the people who earn nothing - but live off property, shares, and other unearned, "private incomes". LIT isn't inherently "fairer" - albeit that it sounds so, on first hearing.
In addition, all major OECD countries tax property in some manner - its called having a wide tax base that taxes all forms of wealth/income. Without Council Tax (or an improved property tax), Scotland's wealth, based on inflated house prices, will be tax free. This would economically illiterate.
Note: the Council tax is not perfect and I would favour sunstantive reform (more radical than offered by Lab or Cons), but a nationall-sit "local" income tax is not the answer.
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