Replacing welfare with a negative income tax would solve Osborne’s problems | Ben Southwood for Conservative Home

Head of research at the ASI, Ben Southwood, wrote for Conservative Home on why a negative income tax may be the solution to Osborne's tax credit problems.

Though barely anyone predicted it at the time, George Osborne’s 2015 budget looks like it will be defined not by his vaunted hiking and rebranding of the minimum wage, but by his massive cuts to tax credits. This is because everyone has suddenly realised that these cuts will take large sums of money—thousands of pounds in many cases—out of the pockets of blue-collar and sometimes Tory-voting workers.

Read the full article here. 

Britain’s welfare system is overcomplicated, wasteful and counterproductive. In Free Market Welfare: A case for a Negative Income Tax, Michael Story makes the case for merging most working-age benefits, including tax credits, into a Negative Income Tax – a single, tapered payment that tops up the wages of the working poor and guarantees that work always pays.

ASI comments on new report "Free Market Welfare" feature in The Week

Ben Southwood, Head of Research at the Adam Smith Institute, has had his comments regarding the proposed tax credit cuts featured in The Week.

Some are even calling for this to be catalyst for more radical change. Writing in City AM, the Adam Smith Institute's Ben Southwood called for tax credits to be replaced by a "negative income tax"

"It might guarantee a monthly income of £700," Southwood writes. "For each extra £100 a person earns... they lose £50 of their initial £700 benefit. When their wages hit £700 they're getting £350 from the state, for a total of £1,050 - when their wages hit £1,400, they no longer get anything."

Read the full article here.

ASI report "Free Market Welfare" is featured in the Financial Times

The latest Adam Smith Institute paper, "Free Market Welfare: The Case for a Negative Income Tax", has featured in the Financial Times.

Two free market think-tanks, the Adam Smith Institute and the Institute of Economic Affairs, argue that the entire tax credit system should be dismantled and replaced with a simple “negative income tax” — a minimum guaranteed income that tapers away as earnings rise.

Sam Bowman, the Adam Smith Institute’s deputy director, argued this would “radically simplify the welfare state and guarantee that everybody is better off in work”.

Read the full article here. 

ASI comments on tax credit cuts feature in The Times

The Adam Smith Institute has featured in The Times for our criticism of the proposed tax credit cuts.

The chancellor had a greater ambition in mind, to create a “lower tax, lower welfare, higher wage economy”, as he told the Commons yesterday. Few oppose the principle but when both rightwing think tanks such as the Adam Smith Institute and the unions lambast the policy for deterring work, it’s clear the delivery is flawed.

Read the full article here.

Sam Bowman discusses tax credits and new ASI report "Free Market Welfare" on Sky News

Deputy Director of the Adam Smith Institute, Sam Bowman, was interviewed for Sky News on the proposed tax credit reforms and the ASI's new report "Free Market Welfare".  

Sam Bowman discusses ASI report "Free Market Welfare" on LBC

Deputy Director of the Adam Smith Institute, Sam Bowman, discussed the ASI's latest report "Free Market Welfare: The Case for a Negative Income Tax" on LBC.

New ASI paper "Free Market Welfare" features in City AM

City AM wrote an article on the findings of the ASI's latest paper, "Free Market Welfare", which champions a negative income tax system as an alternative to the current tax credits scheme.

The government should replace all major welfare payments with “nega­tive income tax”, an eyebrow-raising report from free market campaign group the Adam Smith Institute (ASI) has suggested.

The radical negative income tax would pay out to British citizens in decreasing amounts until they reach a certain wage, when they would begin paying tax.

Read the full article here. 

Britain’s welfare system is overcomplicated, wasteful and counterproductive. In Free Market Welfare: A case for a Negative Income Tax, Michael Story makes the case for merging most working-age benefits, including tax credits, into a Negative Income Tax – a single, tapered payment that tops up the wages of the working poor and guarantees that work always pays.

Sam Bowman discusses new ASI report "Free Market Welfare" on BBC Radio Wales

Deputy Director of the Adam Smith Institute, Sam Bowman, was interviewed for BBC Radio Wales on the government's proposed tax credit cuts, and argues that a negative income tax would be a better, simpler system of welfare.

In a report that we released today, we called on the government not to cut tax credits, but to simplify the system, and to simplify the benefits system in general into what some economists call a negative income tax.

Listen to the full interview here. (Starts 49:12)

Britain’s welfare system is overcomplicated, wasteful and counterproductive. In Free Market Welfare: A case for a Negative Income Tax, Michael Story makes the case for merging most working-age benefits, including tax credits, into a Negative Income Tax – a single, tapered payment that tops up the wages of the working poor and guarantees that work always pays.

ASI report "Free Market Welfare" has been featured by the Press Association

The Adam Smith Institute's latest paper "Free Market Welfare: The Case for a Negative Income Tax" has been featured by the Press Association, and in over 30 local papers.

Call for Negative Income Tax as Alternative to Tax Credits

The Government should replace tax credits and other means tested benefits with a Negative Income Tax payment that is gradually withdrawn as people's earnings increase, a new report by a think tank has suggested.

Britain’s welfare system is overcomplicated, wasteful and counterproductive. In Free Market Welfare, Michael Story makes the case for merging most working-age benefits into a Negative Income Tax – a single, tapered payment that tops up the wages of the working poor and guarantees that work always pays.

ASI features in The Observer and The Independent for opposition to tax credit cuts

The Adam Smith Institute was featured in both The Observer and The Independent for our opposition to the government's tax credit cuts. From The Independent:

In an article for independent.co.uk, Seema Malhotra, the shadow Chief Secretary to the Treasury, and Owen Smith, the shadow Work and Pensions Secretary, say: “It takes a master politician to unite the whole of the left of British politics with The Sun, The Spectator magazine, a sizable proportion of the new intake of Tory MPs, as well as the Bow Group and the Adam Smith Institute.  So credit where it’s due to the Chancellor, who has pulled off that seemingly impossible feat with his plans to cut tax credits.

Read the full article here.

And in The Observer, Deputy Director of the ASI Sam Bowman was quoted:

And thats why even right wing thinktanks the Adam Smith Institute and the Institute for Economic Affairs, hardly the skivers' friends, criticised the policy last week: it will undermine work incentives. Sam Bowman of the ASI said: "The government has long claimed to want to make work pay for everyone, but cutting tax credits would disincentivise work and hurt those at the bottom of society."

Read the full article here.