LAST week I wrote about the gap now opening up between Scottish and UK tax policy, with an evident intention on the part of Nicola Sturgeon’s Government to widen it in future and bring home to us the different economic priorities being followed in Edinburgh and London.

No sooner had her Finance Secretary, Derek Mackay, sat down from his budget speech on Thursday than the official watchdog, the Scottish Fiscal Commission, published the lengthy and detailed forecasts it had supplied to him as the basis for his plans.

A parliamentary performance like his is perhaps bound to be longer on resonant declarations – “This budget delivers for the Scotland of today, and invests for the Scotland of tomorrow” – than on minute analysis. I will take a closer look here.

Mackay boasted that while in Scotland the burden of income tax is rising at the upper end of the scale, it is falling at the lower end. Our system is, by his deliberate choice, gradually becoming more progressive. This is meant to be a clear expression of the government’s commitment to social equality. But words do not always translate automatically into deeds.

In fiscal matters especially, we have learned a taxing government cannot just snap its fingers and expect the taxed electorate to fall into line. People read their newspapers, or go so far as to consult their accountants, and then they may change their behaviour in order to frustrate official policy in their own favour.

Why not? Most of us would rather spend our hard-won earnings on ourselves and our families than pour more cash into the bottomless pit of public spending programmes uncannily incapable of meeting their targets.

For each one of us, it will of course be a delicate judgment when exactly to move into evasive mode, especially if the government is testing the sharpness of our reactions by very small increments to our tax bills. This is the present approach in Scotland. But it means the taxpayer’s own response can be fine-tuned too.

While the Scottish median full-time wage last year was just under £29,000, already a quarter of the population does not in fact work full-time. If part-time workers are included, the median wage falls to £23,000. So in the labour market, against a background trend towards steady loosening of historic hierarchical practices, more and more of us can decide for ourselves when to work or indeed whether to switch to a part-time regime and spend the liberated time with the wife and kids or on the golf-course.

That is also completely consistent with the emerging digital economy. As a spin-off, we will from now on have an extra incentive to make minor behavioural adjustments so as to ensure we don’t move up into the higher brackets of income tax.

A second factor may be at work for Scottish workers, arising from the fact we have yet to leave the union of 1707. We are taxed according to our domicile, not according to how we make our money. The border is not that far from the main centres of population in the central belt, and quite within the commutes common in other countries.

People who feel they are being taxed too much in Scotland could readily move their residence to England. The income tax they paid would then be determined by the rules in their new home. I am sure there is a fortune to be made by any shrewd operators who set up as estate agents in Carlisle or Berwick to cater for the needs of these Scots escapees. At the same time, Scotland’s tax system could deter high-earners who might have thought of coming from elsewhere to live here. Mackay then loses out on two fronts.

He cannot be unaware of the prospect. His own fiscal commission says it is closely watching any behavioural changes likely to affect the amount of tax collected. Its chief executive, John Ireland, himself highlighted the two main risks to the revenue: “We think people will adjust their hours and that bigger [tax] gap will affect where people choose to relocate.” In the worst case trialled by the forecasters, there could be £250 million less in tax receipts by 2023-24.

In fact there are 250,000 Scots earning more than £50,000 a year who could reduce their tax if they moved across the border. It may be unlikely they would all do so, but another of the fiscal commissioners, Professor David Ulph of St Andrews University, said: “If they change residence then we lose the entire tax revenue. So you don’t have to get a lot of people to shift to have a big impact.” And this is not a concern merely in terms of tax. For a long time ahead Scottish governments will be worrying about the shrinkage in the national population of working age, meaning fewer earners will need to support a growing army of dependants, especially pensioners. That is why the Scottish Government does not share the UK Government’s hostility to immigration, and why Brexit will do more harm here than in England. Altogether, Mackay faces a range of possible results from his measures which may not prove compatible with the Government’s long-term hopes for Scottish society. If equality is the overriding goal, as ministers keep telling us it is, the tax system offers limited help.

Equality became a broad objective of the UK tax system after 1945, yet there has been little consistent movement towards it. Progress in one decade is reversed in the next when governments change or economic crisis strikes. Public support is fickle, as the bleeding heart gives way to feelings of vengeance against shirkers or immigrants.

If equality could not be achieved by strong political action in the immediate post-war period and during the 1970s, what hope is there for the weaker political action to which the Scottish Government seems constrained? And it’s not just us: most European countries have found it hard to pursue equality through the tax system. For myself I would guess something like our degree of inequality is inseparable from the present stage of capitalism. Abolish capitalism instead? Best of luck with that one.

In the unlikely event I were called in as an economic adviser to the Scottish Government, I would take the opposite tack. I would let equality look after itself, and instead concentrate on maximising the revenue in real cash terms. My aim would be to make sure the amount of money coming into my exchequer was the most that could be raised out of an economy run without distortion on free-market lines.

That means flat taxes, with everybody contributing the same percentage of their income and the poor liable for nothing. The flat tax would be set at a level which experience teaches us the people are willing to pay for the sake of the state they seek.

Here it would probably remain relatively high, because taxpayers want the most expensive item, the National Health Service, to stay as it is. The system still becomes more efficient because there is no incentive to evasion. If the prime aim is to cover necessary public spending we can do that with flat tax. Since we cannot be taxed into equality, forget a progressive system.

Flat taxes are no pipe-dream. Quite close to home and to our own political traditions, Jersey and Guernsey have them.

So do about 30 countries round the the world. They include 10 in eastern Europe, which face the same problems as Scotland in rejuvenating economies with a history of being run badly from above, by self-interested politicians of dubious ability, rather than from below, out of the energies of the people – something which really would set us apart from the UK.