Negative Income Tax Comes to Britain, 1955–1970

The 1960s witnessed a revival of concern about poverty on both sides of the Atlantic. One of the most fashionable responses to this ‘rediscovery of poverty’ in the United States was the concept of a Negative Income Tax, which Milton Friedman popularized in Capitalism and Freedom (1962). Much of the literature on the US guaranteed income debate presents NIT as a distinctively American phenomenon, but the possibility of integrating tax and benefits in this way was also central to British social policy during the 1960s and 1970s. Both Conservative and Labour governments hoped that NIT could allow them to target benefits on the poor without the stigma of conventional means-testing—focusing first on pensioners, then on working families with children. The idea attracted wide attention inside and outside government, but ran up against both cultural resistance to wage supplements and technical difficulties in paying benefits through the PAYE system.