A negative income tax seems to me like a generally good, if naive, solution. Of course the problem is that a straight forward negative income tax creates a res

A negative income tax seems to me like a generally good, if naive, solution. Of course the problem is that a straight forward negative income tax creates a resistance level where each additional dollar earned is worth less and less. The simple negative income tax leads to the situation in the 1970's study mentioned in the article (people are discouraged from working). I think the solutions lies in creating support levels, or income targets. I.e. $15k or less is taxed at 0%, $15k - 20k at -5%. This would establish a support level at $15k. I can even imagine a system where meeting an "income goal" (support level) one year triggers a higher one for the next year. I.e. if you make $16k in 2008 and are taxed at -5%, you must make $20k in 2009 to receive the -5% rate again, otherwise you'll be taxed at 0%. Eventually, if the person keeps meeting income targets, they'll no longer be poor (by definition).