The discussion paper provides useful background to help inform the debate on the future use of the income tax powers devolved to the Scottish parliament. The paper covers matters such as the extent of our income tax powers, how the Scottish Government’s final budget is set, the current make-up of income taxpayers in Scotland, the interaction with reserved areas of policy making and some international comparisons.
The paper also explains what taxes pay for and the choices available to the Scottish Government and Parliament. It sets out the tests against which the Scottish Government believes any tax change should be judged.
The tax proposals of the parties represented in the Scottish Parliament are also set out and analysed.
The analysis of the alternative approaches that could be adopted have been undertaken by the Scottish Government’s Office of the Chief Economic Adviser and approved by the Scottish Government’s Chief Economist.