Imagine a graph where the x-axis is how much you make at your job, and the y-axis is how much spending money ends up in your bank account after the government g

Imagine a graph where the x-axis is how much you make at your job, and the y-axis is how much spending money ends up in your bank account after the government gets involved by either giving you welfare money or taxing you. So without the government you just have y = x. At zero income you have zero money, which is not ideal, so we'll try to come up with a system to give the destitute money so they don't die of starvation. As a first crack at it, let's just give everyone who makes less than say $10k per year a bundle of aid that amounts to the fixed value of $1000 per month. This perhaps an improvement because we aren't ignoring the needs of the poor, but it creates a problem, which is what a welfare trap is. Imagine the graph for this situation. If you're making over $10k per year it's y = x, but if you're making less it's y = x + ($1000/month). So at x = ($1000/month) there's a sharp drop in take-home money. So people who would perhaps like to make a little more money are disincetivized from doing so because they would stop taking home that $1k per month and be exchanging it for a much smaller raise. The negative income tax proposal attempts to solve this first by just providing cash to poor people instead of various goods that are hard to measure, and then by ensuring that the curve we're talking about never has a negative slope or drop. For instance imagine if you make zero dollars, you're given $1000/month, but then for every additional dollar you make independently, you receive 25 cents less aid. You'll always want to make more independently in this situation even if you don't keep it all.