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?: Adam Smith Institute puts top tax rate at 54%Mentioned in: UK picks champions as EU shares the bet
European Tech SovereigntyMentioned in: Nine of 14 Reform councils raise council tax
UK Local Elections 2026Mentioned in: Swinney bids for 2028 vote; Streeting refuses
UK Local Elections 2026Mentioned in: IFS rejects every Scottish party's fiscal plan
UK Local Elections 2026Background
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.