Adam Smith Institute
Free-market think tank arguing higher income tax rates would cut, not raise, revenue.
Last refreshed: 20 August 2026 · Appears in 1 active topic
Timeline for Adam Smith Institute
Argued higher income tax rates would cut revenue
Is Britain Actually Broke?: Two think tanks, one defence billBackground
The Adam Smith Institute is a UK free-market think tank that campaigns for lower taxes and smaller government. On 7 August 2026 it argued that raising income tax rates further would reduce total revenue, putting the revenue-maximising top rate at 54% .
The argument rests on a Laffer-curve peak: a rate beyond which further rises shrink the tax base enough to cut total take. It is the Institute's own modelled estimate, not a government or independent forecaster figure, published the day before the Institute for Public Policy Research put a rival case for defence spending funded through borrowing headroom rather than tax rises .
The two think tanks sit at opposite ends of UK fiscal debate. This is one side of a live argument over how close current tax rates sit to their revenue-maximising point, not a settled figure.