Tartan tax

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When legislating for the Scottish Parliament, a number of matters were reserved by the UK Parliament ('Westminster'). One such reserved matter was taxation; however, this had been a key point in Scottish negotiations relating to parliamentary control. As a means of compromise, Westminster afforded the Scottish Parliament the ability to vary income tax, which was subsequently given the consent of the Scottish electorate in the 2nd question of the 1997 devolution referendum.

Therefore, the Scotland Act 1998 granted the Scottish Parliament the power to vary income tax by +/- 3p in every pound. This power is often referred to as the tartan tax, a phrase first used by Michael Forsyth as a way of attacking the power, using the idea of 'tartan' to get across the idea that it would be an extra tax on Scots alone.^[1] However, the phrase tartan tax would only correctly apply if the tax were varied upwards - no phrase has yet been suggested if the tax were varied downwards. To date, the Scottish Parliament has chosen not to utilise its tax varying powers.

[edit] Demands for greater tax varying powers

Though present tax varying powers have not been used, demands for extra powers for the Scottish parliament have included demands for fiscal autonomy which would give control over all taxes raised in Scotland to the Scottish Parliament.^[2]