ABSTRACT
This chapter argues that a critical element in the wider finance debate is the form of local tax adopted and how it interacts with other forms of finance available to local government. It discusses key interconnections that found between finance and the structure of local government and its critical fiscal and service interconnections with higher levels of government. The income tax element may be a supplement or the core form of local tax; it may be a national surcharge on the national income tax that is then redistributed locally or in some cases it may be a genuinely local contribution. The Scottish Government promoted the freeze as a way of protecting household disposable income in difficult times, but it should be recognised that the freeze conferred the greatest absolute benefit to those in the higher council tax bands. The Commission recommended that the council tax should be replaced and the freeze ended.
