The issue with negative income taxes is that they create steep effective marginal tax rates. Suppose you set the floor at 12k, and suppose someone has an existi

The issue with negative income taxes is that they create steep effective marginal tax rates. Suppose you set the floor at 12k, and suppose someone has an existing job at 12k. They immediately lose all incentive to work, because they could make the same amount by not working at all. Your effective marginal tax rate is 100%. There are ways to make this effect less pronounced, but those ways end up morphing a negative income tax to be closer to a basic income. If you get rid of the effect altogether, you get... A basic income. Even if you make twice as much as the negative income tax floor, you're still facing really high marginal rates. Enough people would drop out of the market economy to make the negative income equivalent to a basic income in financial cost, but more inefficient both because low income jobs would be obliterated and because it'd be (a bit) more complicated to administer and more prone to fraud. Compare that to a basic income. There, as a first order effect there's no reason for the person to quit the 12k job, because they're now making 24k. It might seem silly to give someone making 500k 12k a year, but economically and fiscally it doesn't matter: they're taxed at a rate that covers their own basic income and plenty more.