Q:
Why is the income tax issue so important?
A: It goes to the heart of the notion that to increase economic accountability a parliament should not just spend money, but raise it too.
Q: That would mean, then, that for maximum accountability, it should raise 100 per cent of its income tax?
A: It's not, for some, that straightforward and it must be noted no federal state in the OECD devolves all its income tax to regional/national levels of government.
Q: Where do the main parties stand?
A: The SNP, the Conservatives and Liberal Democrats want all or virtually all income tax devolved, arguing this would enable Scotland to tailor fiscal policy to the nation's needs. But Labour has placed greater emphasis on the UK pooling principle.
This has been most forcefully expounded by ex-PM Gordon Brown, who has argued that handing over all income tax power to Scotland and a consequent ban on Scottish MPs voting on finance matters at Westminster would create a "lethal cocktail" and lead to the break-up of the UK.
Q: So people like Mr Brown want no income tax power transferred to Edinburgh?
A: No; he wants three-quarters of it transferred, with half the VAT raised in Scotland assigned to Holyrood, which would mean MSPs would be responsible for raising 54 per cent of the money they spend.
Even some of the other parties like the Conservatives do not want all income tax devolved. They want the control of income tax on investments, dividends and savings retained at Westminster to preserve the integrity of the UK single market in financial services. The Lib Dems would do something similar and have a proportion of the receipts on such income tax allocated to Edinburgh. The SNP, meantime, wants "full domestic fiscal and economic autonomy".
Q: So are people like Mr Brown exaggerating the problems?
A: Not according to some experts. This week the Centre for Macroeconomics surveyed a string of top economic professors, the vast majority of whom came out against handing over full income tax powers to Holyrood.
Their fears included full fiscal autonomy would: "undermine the nation state" of the UK; the accounting difficulties would be "a nightmare"; the costs of tax competition would far outweigh the benefits and any build-up of debt by Scotland could lead to a "bail-out from the rest of the UK".
Q: So will the Smith Commission get a deal on income tax?
A: Almost certainly, but we will probably not know until Thursday where the line will be drawn.
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