City's taxing problem

And today, council leader Steven Purcell branded the new tax plan "a disaster" for Scotland.

The Scottish Government has consulted councils on plans to replace the unpopular council tax with a 3p in the pound income tax.

Glasgow analysed data from 6000 people in the city and found 72% would be better off under the proposals.

But the council would be faced with a cash shortfall of £60m meaning services would be cut and jobs axed.

City finance experts calculated local income tax would have to be set at 4.5p - instead of the 3p proposed by the Government - to cover the financial shortfall.

But at that level almost half the population of the city would be worse off.

The research found 47% would pay less, 46% would pay more and for 7% there would be no difference. Rate of change for UK PLANS to introduce a local income tax is the latest in a number of changes to local taxation in recent years.

Until 1989, the UK operated a system of rates which each household paid based on the rental value of a house.

It was replaced in 1989 in Scotland by the community charge or poll tax by Margaret Thatcher's government.

It was a fixed tax per adult resident, set by each council, and was deeply unpopular.

It seemed to shift the tax burden from rich to poor, as it was based on the number of people living in a house rather than its estimated price.

There were mass protests and Margaret Thatcher was toppled in 1990.

In 1993-94 her replacement, John Major, introduced the council tax system. It is based on the capital value of a home and it has a 25% discount for single-occupancy homes.

The local income tax, if it gets the go-ahead, will see adults paying for council services based on a percentage of their income.

Mr Purcell said: "We have taken a long hard look at this proposed new tax and I simply cannot see how it can be made to work without increasing taxation for a large number of people or drastically cutting council services.

"We will either see cuts of tens, potentially hundreds, of millions of pounds or nearly half of Scots will pay substantially more tax.

"Both outcomes would be a disaster for Scotland's economy.

"No-one thinks the council tax is perfect. However, I would urge the Scottish Government to have another think about how best to fairly raise the resources to fund our schools, roads, care homes and other services."

Around 70,000 households in Glasgow have full council tax benefit - around a quarter of the homes in the city - and as a result pay no council tax.

City Treasurer Stephen Curran said: "The poorest households would see no change under the local income tax proposals. It cannot therefore be said the proposals would benefit this sizeable proportion of low income households.

"Students who earn more than the personal allowance could also find their tax liability increasing - often those students from less affluent backgrounds who have to work to support themselves through further and higher education.

"There would also likely be a significant financial and administrative impact on businesses employing workers resident in Scotland.

"For example, the council as an employer of 32,500 members of staff would see initial set-up costs of around £550,000 to £610,000 and annual administration costs of around £70,000 to £180,000.

"There could also be real difficulties monitoring the place of residence of the working population with a subsequent impact on collection rates."

Mr Curran said the council also has concerns that local authorities would no longer be accountable to voters if what they could raise in tax was set by Holyrood.

He added: "This would result in local government becoming local administration and would undermine the ability to take local decisions according to local needs and priorities."

A report which will go before the executive committee next week recommends the council tells Holyrood it cannot back income tax plans because it would result in a financial black hole which would hit local residents.

The plans for the local income tax were sent out for consultation by the SNP led Scottish Government earlier this year. The LibDems have always backed the idea but it has no support from labour or the Tories.

SNP group leader John Mason blasted the report as "nonsense and scare-mongering".

He said: "Glasgow gets 80% of its money from Government grant and what has been designed is that councils which get more from local income tax will get less grant and councils which get less from local income tax will get more grant.

"There will be no winners or losers from a council point of view."