The word unemployed changed to employed on torn paper
Kevin Boyd, an associate policy analyst at the R Street Institute, authored a post directly comparing the negative income tax, a variation of the basic income guarantee, to traditional welfare and the minimum wage. Boyd contends that a negative income tax would avoid the potential for job loss and price hikes caused by the minimum wage while avoiding the pitfalls of the current welfare bureaucracy. Boyd advocates for an income threshold set at 130% of the poverty line, which would amount to a guaranteed minimum income of $30,711.20. W-9 forms would be collected monthly and payments would be calculated each month based on the previous month’s income. Paired with the abolition of the minimum wage, Boyd believes that unemployment can be greatly reduced without an increase in poverty thanks to the negative income tax.
For the entirety of Boyd’s post, see
Kevin Boyd, “A negative income tax beats both the minimum wage and welfare” R Street Institute, September 12, 2014
Minimum wage removed? It is invitation for hiring workers to work for free ( like interns), just because they get Negative Income Tax payments.
NIT is a very bad idea!
I think an Unconditional Basic Income would work far better. With that NIT model, what would be the incentive to actually work.
An individualized, working-age, NIT may be preferable to a family-based NIT. There are pluses and minuses for the differences between universal basic income and NIT[1], but they have similarities:
B = basic income (guaranteed minimum income)
t = tax rate
Y = wage income
D = disposable income
UBI: D = Y + B – tY which post-processes clawback
NIT: D=Y-(-B+ty) = Y+B-ty [2]
[1] The Negative Income Tax and Basic Income are pretty much the same thing
http://www.adamsmith.org/blog/tag/basic-income/
[2] Basic Income and Negative Income Tax: A Comparison with a Simulation Model | Pertti Honkanen | 12/2014
https://www.deepdyve.com/lp/de-gruyter/basic-income-and-negative-income-tax-a-comparison-with-a-simulation-xDklGJ0fhl
B = basic income (guaranteed minimum income)
t = tax rate
Y = wage income
D = disposable income
UBI: D = Y + B – tY which post-processes clawback
NIT: D=Y-(-B+ty) = Y+B-ty