Council tax currently yields £9.5m per annum (CnES annual report 2006/07 p9) and the detail is available on p35 of the report.
The Inland Revenue have apportioned tax yield by constituency (Table 3.15) for 2005/06, and estimate the income tax yield in the Western Isles is £28m per annum.
In my view, the use of different years and the errors in the estimates are negligible for the purposes I intend.
If Council Tax is abolished, and replaced by a 3% rate in the Western Isles there will be a shortfall of £8.6m per annum: £9.467m - (£28m x 3%) ≈ £8.6m.
Therefore for a Local Income Tax to be acceptable, Central Government will have to pledge to increase basic grant support by £8.6m which will have to come from cuts in other services or from other sources of income (i.e. taxation).
That doesn't necessarily make LIT A Bad Thing, but what it does emphasise is that there is a large sum to come from somewhere to bridge the gap and that abolishing Council Tax is not a painless matter.
Looking through the other data, there are some fascinating insights....* This can be distorted by reducing taxable income from self-employment with allowances for replacing equipment
Mean (the 'average') self-employed income is £13,000 but the median (the number exactly halfway through a list sorted by value) is only £7,200. This clearly shows that the vast majority of self-employed people have very low taxable incomes, and a lot have very high taxable incomes*
This disparities in other income sources are nowhere near as large, implying that income distribution from other sources and total income is broadly the traditional 'bell-curve'.
I could point out that to replace Council Tax with LIT would require a tax rate of 33%, but that is so ridiculous that no-one would suggest that would happen. Would they?