Monday, 20 April 2009

People respond to incentives (Part 94)

The government likes to propagate the myth that 'tax credits encourage work'.

Even ignoring the half of tax credit payments that goes towards encouraging/subsidising unemployed single mothers or is lost to fraud and error, Rab C Nesbitt provides anecdotal but reliable evidence that tax credits discourage work.

I explained why in the comments to his post.

2 comments:

RantinRab said...

Just to hammer the point home Mark, this morning I found out that one of my full timers wants to drop his hours. I'm sure the fact his missus is due to drop their first sprog anytime is sheer coincidence...


Ta for driving some traffic my way.

Mark Wadsworth said...

Excellent point, I've answered that one over at yours as well (or else this will get messy).