Experts have told the Scottish Government they could raise over £500m by slapping higher taxes on the wealthy.
The IPPR Scotland think tank advised that changing the income tax rates and thresholds for high earners could help struggling families.
Acting Finance Secretary John Swinney will this month announce the Government’s tax and spending plans for next year.
The IPPR has come up with ideas for how the SNP /Green Government could generate more money to ease pressure on household finances.
They estimate that matching the UK Government’s decision to reduce the level at which the top rate of income tax is paid from £150,000 to £125,140 and freezing the remaining thresholds would raise £400m.
Protecting lower earners by increasing the lower thresholds in line with inflation could cut this sum by £20m, the think tank said.
According to their research, a two per cent increase in the 46p top rate would raise another £100m.
A so-called “progressive” increase in council tax rates, applying to higher bands, could bring in around £40 million.
Dave Hawkey, senior research fellow at IPPR Scotland said: “Progressive reforms to taxation in Scotland are a sensible, practical way for this government to ensure that its ambitious goals are met, to ensure everyone has the opportunity – no matter what their background – to prosper and thrive.
“Not only can the measures we’ve outlined help fund the Scottish government’s pledge to safeguard households struggling to make ends meet in the immediate term, but they can also help to meet their long-term ambitions around ending child poverty and taking the first steps towards its commitment to develop a Minimum Income Guarantee.
“These are the priorities that matter to the people of Scotland, and it is right that those with the broadest shoulders in Scotland contribute fairly.”
In supporting their argument, the IPPR cited polling from June by the Diffley Partnership on higher taxes.
Over 60 per cent of respondents said they “strongly” or “somewhat” supported higher taxes for themselves if it meant increasing benefits to parents and their children.
The figure was 55 per cent in relation to making benefits and the social security system more generous.
Scottish Greens MSP Ross Greer said: “Four years ago, the Scottish Greens secured changes to Scotland’s income tax system, making it the fairest of any part of the UK. We raised hundreds of millions of pounds more for essential services by having the highest earners pay a bit more.
“Scotland’s tax system should be as progressive as possible. The wealthiest in our society can afford to pay more so that those who really need support are able to get it from well-funded public services.
“There is a limit to what more can be raised from devolved taxes, but the cost of living crisis demonstrates the need to do what we can this year with those limited powers.
“The IPPR are right to call for a longer term review of tax policy though, taking in the likes of wealth and the value of land.”
Deputy First Minister John Swinney said: “We have already delivered the fairest and most progressive tax system in the UK, while raising extra revenue to invest in public services and Scotland’s economy.
“The Scottish Government is committed to a fairer, more inclusive and fiscally sustainable form of local taxation. We will consider the impact of the UK Government’s announcements and decisions on Scottish Income Tax will be taken as part of the Scottish Budget on 15 December.”
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