Reports that the government is considering raising National Insurance Contributions to fund social care was greeted with dismay by politicians and economists. Increasing the tax burden on employers and employees could put the economic recovery at risk by lowering wages and halting recruitment.

Professor Len Shackleton, IEA Editorial & Research Fellow, was quoted in The Telegraph, saying: “As for employer National Insurance, this is a crude payroll tax which discourages employment at the margin, and over time is passed onto workers in the form of lower pay.”

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