Scotland’s commentators have a problem with the meaning of ‘middle’
When it comes to describing wealth distribution and its tax implications, commentators appear to have a breakdown in their vocabulary. They constantly refer to 'middle' when what they appear to mean is 'the very, very top'.
There is a case study in today's Herald where columnist John McLellan refers to a “middle class mansion tax bomb”. The numbers he uses to justify his concerns illustrate the problem. He argues that a tax on houses worth over £1 million is an “assault on Edinburgh’s aspirational middle classes”.
He attempts to put a figure on the size of the problem. Using data from the Registers of Scotland he estimates that there may be as many as 11,000 properties worth over £1 million in Scotland. The problems for his argument arise when you try to work out just how 'middle' that is.
Because there are 2.55 million houses in Scotland. Which means that by definition those over a million pounds in value lie at the very top and that they represent 0.4 per cent of all of Scotland's housing.
Having a million-pound house in Scotland is not the business of 'the middle'. It is out of reach of most of the top ten per cent of the wealthiest, and not even half of the top one per cent in Scotland have managed to get themselves a million-pound house.
Which is to say that assuming the writer believes that 'aspirational' people always want a house that is worth more, and taking a million-pound house as a marker of that, then such a house appears to be out of reach of half of the richest one per cent in the country.
To describe this as 'the middle' is quite absurd, but it is par for the course. Since the Scottish Budget it has been far from unusual for media figures to describe the Top Rate of Income Tax in Scotland as a 'middle class tax' despite the fact that it is paid by only the wealthiest one per cent (all data here).
More commonly, the higher rate of tax (paid by 11 per cent of the population) is also taken to be a 'middle class tax' when a 'wealthiest ten per cent tax' is a much more accurate description.
In fact, if you were to divide the adult Scottish population in three and call them upper, middle and lower, then 'middle' class households don't even pay the intermediate rate of Income Tax (the Top, Higher and Intermediate rates between them only represent 33 per cent of citizens).
Or perhaps more strikingly, six per cent of the population who are in that middle group have an income low enough that they are exempt from Income Tax altogether. That is nearly one in five people in the middle income group who do not pay any Income Tax because their incomes are not high enough.
To repeat; it is significantly more likely that someone who is in the middle earning group is completely exempt from Income Tax because their income is too low than it is that they pay the Intermediate Rate. It is extremely unlikely they will pay the Higher Rate, vanishingly unlikely they will pay the Top Rate. Absolutely none will be eligible for the Mansion Tax.
So to describe a tax that hits 0.4 per cent of the population as a 'middle class tax' is inexplicable. It represents a commentator class which is entirely divorced from the reality of the lives of ordinary Scots.
A so-called Mansion Tax greatly benefits anyone you could possibly call 'middle class' by constraining uncontrolled house price rises, funding local services and shifting the burden of tax further towards those who are most able to afford it.