There are three main options for a state’s tax cuts: a single-payer system, a single income tax system and a combination of the three.
But there is a fourth option that has attracted the attention of tax experts.
In the case of the Scottish Government, the question is whether to implement the third option or not.
This is a big question, one that raises the spectre of a return to the 1970s, when the Government of the day argued that the UK should adopt the single-payer model and to do so should not be the government’s main concern.
The question that has now arisen is whether the Scottish Parliament can implement the single income system as it currently stands and if so, what will the cost of this be?
The Government of Scotland has been pushing the single rate of tax for decades, arguing that it is the best way to make the tax system fairer.
According to the Scottish Office of Budget Responsibility, the government estimates that a single rate will reduce the amount of money that households have to pay into the tax payer by between £9 billion and £11 billion a year.
The Scottish Government argues that the main economic benefits will be to the middle class, who will see their taxes fall, and to small business owners, who can save up to £1,500 per year.
But the cost to the economy could be as high as £20 billion a decade, if the Scottish government is right.
What is the economic impact?
The UK government argues that it can provide the additional £10 billion a few years from 2020, as well as other benefits to businesses and households.
But this is not enough.
If the UK Government does not provide additional funding for the Scottish tax system, the cost would be far higher than it currently is.
As a result, the Scottish National Party (SNP) is calling for the creation of a new independent tax system to be adopted by the Scottish parliament, the Holyrood Fiscal Council.
“There is no doubt that we have to make some choices,” said Alex Neil, the SNP’s finance spokesman.
He said that the party’s tax reform manifesto, which the Scottish Secretary has promised to deliver in 2020, would provide a single tax system.
Neil said that while the SNP has made clear its intention to introduce a single taxation system, it is unlikely that the SNP will be able to secure the necessary votes in Holyroods.
“If the SNP does not have a majority in Holyroe, we cannot make the changes,” Neil said.
So what can the SNP do?
The SNP says it will set out its plan to the Holyroe Fiscal Council in March.
The party has already agreed with the Scottish Labour Government that it will implement the Single Rate of Tax and will set a target of getting its plan through parliament by the end of April.
In the event that the Scottish Treasury does not agree with the SNP, Neil said that it would have the option of asking the Scottish Supreme Court to overturn the decision and then going ahead with the Single Income Tax and the Single Payer Tax.
There are also other options the SNP could consider.
A number of independent Scottish economists have suggested that a tax cut for Scotland could be combined with other measures to raise revenue.
If the UK government was to implement a single payer system, they said, it would be difficult to see the revenue coming from taxes that are already high.
One of the most controversial proposals for a tax-cut is a Scottish “double dividend” scheme, which would see income tax withheld from dividends from both companies in Scotland and those in England.
It is estimated that such a system could raise up to $2 billion a season, with the proceeds being used to fund social housing and education.
However, this is controversial because it is thought that the Scots would be forced to pay higher taxes to fund such a scheme, and because it would potentially result in the UK being forced to increase taxes in order to fund it.
What is a double dividend?
A double dividend scheme is a type of tax cut where a company in England receives income tax from one company in Scotland.
In effect, the dividends are split equally between the two countries.
When this is implemented in Scotland, the tax burden would fall to Scotland, which could then use the proceeds to fund the social housing scheme and the education schemes.
But the idea has drawn considerable opposition from some business groups and others, who argue that it could create more competition, especially for UK firms, and would mean that Scots could get less for their money.
Why is a single return different from the double dividend and how would it affect Scotland?
While the double-dividend and the double dividends are different in some ways, they are very similar in other ways.
First, a double- dividend scheme would require the Scottish taxpayer to pay a different rate of income tax to