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Negative income tax


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What do you guys think of it? For those who don't know, it's basically a tax system wherein, if you earn less than a specificed amount, the government subsidizes your income to ensure you're within their cutoff. We've been talking about it in one of my eco classes and the pros and cons to me seem as follows -




Would almost certainly lower poverty in the country applied

The need for a lot of welfare programs, like medicare, medicaid, public housing, food stamps, LIHA, and some argue (though I disagree) social security would be eventually erased

The doing away with of minimum wage could bring back cheap jobs to the country applied that have gone overseas; the worker would not be as hurt because he would have the subsidized negative income tax.




Minimum wage would probably be done away with

People would almost certainly work less and could cause an economic slowdown, in the US this was tested in various communities and it was found that people worked on average 3 weeks less per year

Massive fraud possible


I'm on the fence leaning towards a no for this system. I don't like the idea of the government essentially giving people free money - healthcare is a different story but yeah.

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Milton Friedman FTW! colgate.gif


Yes, I love the idea of a negative income tax compared to our current systems like Welfare, Medicare, Medicaid, HUD housing, food stamps, etc.


It would allow all of the above mentioned programs to be condensed into one program. This would lessen bureaucracy, reduce costs, stop people from being trapped in dependency, and not discourage productivity.


I don't see why it isn't more popular, because it appeals to liberals that like safety nets and libertarians who like the minimum amount of government as possible to manage things.


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I'm in favor of a basic income guarantee but I don't like this method of going about it. I mean if we want to continue making people pay for food, and work for pay, we will have a problem. Developments in technology could very well eliminate most manufacturing jobs by the end of century. I'm not just talking about cars, and tv sets. Fast food is essentially manufacturing, that could easily go mechanical. In a society like that, the wage-work complex could not be maintained and we'd need some sort of b.i.g. or move towards an even greater change.


The libertarians might not be in favor because it still requires the state to have a massive tax apparatus to figure out who didn't meet the cut. Though you'd think they'd lend it some support from the loss of the minimum wage (a possible market distortion) and the curtailing of those sorts of services mentioned which also tend to either have a poor history of funding or cause their own market distortions.


I think modern institutional thought is boxed in by preexisting institutions. This robin hood tax is no different then trying to solve health care problems with an insurance program. The goal is noble, but the approach is flawed.


Rown rampage_ani.gif

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