Thursday , November 23 2017
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Adam Smith Institute

The Adam Smith Institute is one of the world’s leading think tanks. Independent, non-profit and non-partisan, it works to promote libertarian and free market ideas through research, publishing, media commentary, and educational programmes. The Institute is today at the forefront of making the case for free markets and a free society in the United Kingdom.

Adam Smith Institute

Things not to do: Place a cap on maximum earnings

Place a cap on maximum earningsThe earnings of Chief Executive Officers have risen spectacularly over the course of the century. This has been especially true of those involved in the finance industries, but has also been true of most of the FTSE 100 companies. Salaries and bonuses running into millions of pounds are common, and even those running into tens of millions are not unknown. The gap between what is earned by the average employees of a company and what is earned by its executives...

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Productivity is everything, here’s how we boost it

The Chancellor decided not to exercise his traditional right to present the budget alongside a stiff drink. That’s a surprise, because today’s OBR GDP Growth projections would have any reasonable person reaching for the bottle. The stubborn refusal of productivity growth to return to its pre-crisis levels has led the OBR to predict that growth will be a sluggish 1.5% for the next five years. By contrast, the US is currently growing at twice that rate.Forget the gimmicks, the jokes and the...

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Things not to do: Substantially increase the Minimum Wage

When the Minimum Wage was first introduced, some analysts predicted that it would increase unemployment, particularly for young people and those from ethnic minorities, as it had repeatedly done in the US where it was set above the level that some people's labour was worth to employers.However, the UK level it was set at was sufficiently low to avoid this effect. Indeed, it was widely criticized as far too low by many of those who had campaigned for it. It has been raised several times, and...

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An interesting little puzzle about corporation tax

We regard this as an interesting little logical puzzle, this fuss being made about corporation tax at present. The basic starting point is that corporations don't pay the tax at all, they cannot. All and any taxes mean the wallet of some live human being is lighter. Whose pocket is being picked by which tax is the study of incidence.About which we have an interesting paper:Data on the foreign activities of American multinational firms provide wage rates and interest rates for a panel of more...

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Is the MoD living beyond its means?

An old joke in the Armed Forces is that if the Secretary of State has to choose between sacking military personnel or Whitehall desk-drivers, the military personnel have to go because he needs the latter to do the calculations. There has been some shedding of top brass and civilians[1] in recent years but the hierarchy remains excessive The Royal Navy has 30 admirals and 70 commodores to supervise the commanders of the 29 fighting ships we still have[2]. We also have a miscellany of 48...

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Things not to do: Abolish university tuition fees

Someone has to pay for university education. In the 1960s when 5 percent of the population cohort went to university, it was possible to meet this out of general taxation. The 5 percent had a very generous ride, with free tuition and local authorities paying maintenance grants. There was, though, a widespread feeling that Britain needed more educated people, and that a higher proportion of the age group could benefit from university education. People looked to the US, where roughly 40 percent...

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Why yes, again, Brexit and the terrors of import tariffs

We are beginning to get to the point that we suspect a conspiracy here. For we've another of these reports telling us that Brexit is going to visit the Holy Terrors upon us all. Which, of course, it, might, for perhaps polite Europeans will no longer speak to us. But it isn't going to be true that the country's terms of trade are so ruined by tariffs that we'll all start to starve.Today's entry is from the Food Foundation, which tells us that the imposition of WTO import duties upon ourselves...

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The ASI’s 2017 Budget Wishlist

Ahead of the Budget on Wednesday 22nd November we give our view on the changes the Chancellor should make to cement Britain's economic recovery, and end Britain's productivity and housing crises. Sam Bowman, Executive Director, on how we should tackle the housing crisis:"Housing is unaffordable because too few houses are being built in the places people want to live. Too few houses are being built because getting planning permission is extremely difficult and unpredictable – the fact that...

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Things not to do: Build much more social housing

There is a need for social housing for groups unable to afford ownership or private rentals, or those with special needs. But the biggest shortage in Britain is of private houses at affordable prices.  In the 1970s and early 1980s social housing, called council houses, represented 35 percent of all houses. They were nearly all owned by local authorities and let out at subsidized rents. Waiting lists were long, sometimes 20 years, and constituted a major bar to mobility of labour, because...

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Why we should tax improved land values

Tax is complex, and it's natural that people would change their mind when they come into contact with new arguments and new evidence. In the past I've argued that we should only tax unimproved land values. After all, taxing improved land values reduces the incentive to improve land. But I've changed my mind: we have to tax value added, and we do it on everything else, so there is no reason to have a special land preference.I have always wondered why land value tax enthusiasts were so obsessed...

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