Here we go again

If I were a Liberal Democrat, I would wish to be rather cautious about accepting this SNP proposition (as outlined in The Sunday Herald):

The SNP administration will this week publish a consultation on replacing council tax with a local charge based on ability to pay. Salmond will lay out plans for a nationally set 3p rate on all earned taxable income. But the LibDems, whose support Salmond needs to push through his scheme, want the rate to be set by councils rather than government Salmond and his finance minister John Swinney met LibDem leader Nicol Stephen and his deputy Tavish Scott on Thursday to discuss a compromise. The talks will continue tomorrow.
The SNP-LibDem summit discussed an idea whereby a centrally imposed 3p tax could be introduced in the short-term, after which councils would be given the power to vary the charge.

There is a big difference between a standard, across-the-board increase in income tax rates and a variable increase according to local authority area, particularly in terms of implementation. Nothing is simple when it comes to the administration of a local income tax. But imagine that you are a big employer based in Edinburgh: you should be able to cope with an instruction from the Inland Revenue to deduct an extra three pence in the £ from all employees residing in Scotland, and between them the Inland Revenue and the Scottish Executive should be able to work out how this can be distributed fairly to the local authorities. On the other hand, our big employer might find it rather more difficult to deal with an instruction that those of their employees residing in Edinburgh have to pay an extra 3 pence in the £, while those who commute from Fife have to pay an extra 2.8 pence in the £ and those from East Lothian an extra 2.5 pence in the £. Indeed, our big employer might find it impossible, not least because payroll systems are simply not set up to identify the local authority areas of those on the payroll. Meanwhile, the Inland Revenue might balk at attempting to keep track of the sums due to each local authority. (Of course, you could leave all the administration to the local authorities, but the problems do not go away.)

Accordingly, a two stage approach to the introduction of a local income tax might take rather longer than one might think.