The SNP joined forces with the Tories and other oppositon parties to vote down the Labour proposal amid concerns it would make Scotland the highest taxed part of the UK.
Labour wants to restore the 50p tax rate for people earning more than £150,000, from the current 45p level, and use the money to invest in public services when the Scottish Parliament gains control over income tax rates and bands in April 2017.
It lodged an amendment in a Holyrood debate this afternoon on “creating a fair and prosperous Scotland”, calling on the parliament to “recognise the need for a higher top rate of tax for the richest earners so that this can be redistributed to tackle wider inequalities”.
Labour Deputy leader Alex Rowley told MSPs: “We should re-establish the principle that those who can afford to pay a bit more are asked to do so.
“The benefits of investing in Scotland’s future will be shared across all sections of society.”
The SNP backed raising the top rate of tax at the 2015 general election but Nicola Sturgeon later ruled out a 50p rate for the first year Holyrood has its new powers.
Tory MSP Adam Tomkins said today: “Scotland will not benefit from becoming the highest taxed part of the United Kingdom. The Scottish NHS won’t benefit from it, Scottish schools won’t benefit from it. It won’t make Scotland fairer, it will make life in Scotland harder.”
MSPs voted down the Labour proposal by 94 votes to 26.