What does the future hold for the welfare state in the post-industrial 21st century? Political and economic forces are threatening the taxation regimes of highly globalised, capitalist societies, prompting an urgent debate around the function of the welfare state and how we pay for it. In a challenge to current policy and thinking, David Byrne and Sally Ruane deploy the concepts and analytical tools of Marxist political economy to better understand these developments, and the possibilities they present for social change. Using the SNP in Scotland as an illustrative case study, current debates are related to a critical understanding of the relationship between taxation and spending, issues that are fundamental to early 21st century politics and the future of the welfare state.