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I thought basic income and negative income tax were two different concepts? Isn't negative income tax = minimum guaranteed income?
by protomyth 11y ago
I thought basic income and negative income tax were two different concepts? Isn't negative income tax = minimum guaranteed income?
- deleted 11y ago[deleted]
- dragonwriter 11y ago> I thought basic income and negative income tax were two different concepts? Unconditional basic income in a progressive tax system is equivalent to a form of negative income tax system. You can achieve exactly the results of the UBI as an NIT, if you set the parameters correctly. NIT looks income conditional (since additional income will reduce the tax subsidy by some proportion), but that's no different than additional income being taxable in a UBI system. (Though many NIT proposals, including, IIRC, Friedman's original, reduce the incentive to work compared to a simple UBI on top of the existing tax system because the effective tax rate on the first effective "bracket" of income on top of the UBI is very high -- 50% in Friedman's proposal -- which retains some of the seen-as-adverse effects of means-tested social benefit programs that NIT/UBIs are usually proposed as an alternative to.)