IFS: Scotland's Higher Taxes May Reduce Revenue

The Institute for Fiscal Studies (IFS) has raised concerns that recent increases in Scotland's top income tax rates may have inadvertently reduced government revenues. Analysis indicates that higher taxes have influenced taxpayer behavior, leading to reduced work, increased tax avoidance, and migration out of Scotland. The IFS urges the Scottish Government to pause any further tax hikes on higher earners, given that early evidence suggests the previous increases have not generated the expected revenue. Critics, including Labour and the Conservatives, have highlighted this analysis as a failure of the SNP's fiscal policy. As the Scottish Budget is set to be unveiled on December 4, the IFS calls for a reassessment of the tax strategy based on new data. The report highlights that those earning over £26,562 now pay significantly more tax than their counterparts in the rest of the UK.