Devolving taxation: the case for and the case against

Debate on devolution almost always turns on which powers are transferred. It rarely turns on the question that governs them: who levies the tax. As long as local resources depend on a national transfer, local autonomy is autonomy of management, not of decision.

The case for. An entity that raises its own tax answers for its level before its own voters. The link between what is paid and what is received becomes visible again, which is the most effective democratic check on spending. It can also match taxation to its real economy, which a uniform national rule ignores by construction.

The case against. Tax bases are very unevenly spread. A territory where activity concentrates will raise a great deal; a rural one will raise little, for needs that are often greater. Without an equalisation mechanism, devolving taxation institutionalises the gap between the two and turns an economic inequality into an inequality of public services.

Both positions meet on one point: equalisation is the heart of the matter, not a correction to be added afterwards. The question is therefore not “should taxation be devolved” but “what share, and under what redistribution rule” — a technical question whose answer is entirely political.

LECAP FORUM sets out the positions in play and their arguments. This section is opinion: it is identified as such and is not to be confused with fact-checking work.