4 ms·
Yes, as it lowers marginal tax rates. Currently with welfare, you have a very high marginal tax rate. You earn an additional $20,000 say, but lose the $10,000 y
by graeme 8y ago
Yes, as it lowers marginal tax rates. Currently with welfare, you have a very high marginal tax rate. You earn an additional $20,000 say, but lose the $10,000 you had with welfare. 50% marginal tax rate. Even higher if there's some actual tax on that $20,000.
If there was basic income where you still kept the $10,000, you would have a 0% marginal rate.
It's not clear how the finns designed their system. But Milton Friedman was actually for a form of basic income instead of social support, for this reason.