In economics, a negative income tax (abbreviated NIT) is a progressive income tax system where people earning below a certain amount receive supplemental pay from the government instead of paying taxes to the government. Such a system has been discussed by economists but never fully implemented. It was developed by British politician Juliet Rhys-Williams in the 1940s and later when United States economist Milton Friedman combined NIT with his flat tax proposals.
Negative income taxes can implement a basic income or supplement a guaranteed minimum income system.
In a negative income tax system, people earning a certain income level would owe no taxes; those earning more than that would pay a proportion of their income above that level; and those below that level would receive a payment of a proportion of their shortfall, which is the amount their income falls below that level.
Read more about Negative Income Tax: General Welfare, Criticism, Specific Models, Implementation, Advocates
Famous quotes containing the words negative, income and/or tax:
“The negative always wins at last, but I like it none the better for that.”
—Mason Cooley (b. 1927)
“You boast of spending a tenth part of your income in charity; maybe you should spend the nine tenths so, and done with it.”
—Henry David Thoreau (1817–1862)
“I come into the peace of wild things
who do not tax their lives with forethought
of grief.”
—Wendell Berry (b. 1934)