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.
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.