Explicit-tax

In this very short book, Professor A.R. Prest considers implicit and explicit marginal tax rates in England and Wales in the late 1960s.

Essentially the author considers what the rates of taxation are as implied by a wide range of social benefits. There has been a fiction perpetrated on the British people since the National Insurance scheme was introduced in 1948 that taxes and benefits were somehow distinct and unrelated. Similarly a further refinement was introduced that the varying benefits available to those who qualified for them were different between each other. Alas this is not the case nor was it then but the fiction served to obscure in people's minds the true nature of social benefits in the UK.

Professor Prest's timely account fits handsomely with the earlier Research Monograph on a 'Policy for Poverty'. It's closely argued and succint analysis lay bare the terrible impact on the incomes of the poorer in British society due to the interaction of the tax and benefits systems. He considers a variety of possible solutions to the issue and also looks on the impact of the tax rates upon entry, participation and exit from the labour market.

The paper is a masterful account of the issue and a wonderful example of the skills of the IEA Editor, Arthur Seldon.