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I basically just moves the bottom rung above poverty, so these people can now spend and help the money velocity increase. Plus, they are no longer in poverty (h
by hndamien 9y ago
I basically just moves the bottom rung above poverty, so these people can now spend and help the money velocity increase. Plus, they are no longer in poverty (hooray!)
- rsrsrs86 9y agoYes. It works as a fiscal policy instrument. But the important thing is that it doesn't affect prices. Messing with prices typically causes dead weight. Value added tax can redistribute wealth but has a clear overall economic cost. Lump sum income policies (negative income tax!) has no dead weight.