What is a negative income tax?
The negative income tax is an interesting but controversial concept that indicates changes in the way the progressive tax system could be implemented. This would guarantee a certain level of income for all workers by completing the salary of workers who did not fulfill what was defined as a salary with minimal income, tax payments. Those who actually paid taxes would achieve significantly above the minimum income and their payments would provide money to replenish the minimum income to others. Such taxation would also probably be valid for the required government expenditure. The most attributed is Lady Juliet Rhys-Williams, British 20th century policy. The American economist Milton Friedman, best known as one of the economic advisors of President Ronald Reagan, expanded to include the concepts of Lady Rhys-Williams a few years later.
Despite the work and other economists, in fact, there has never been a negative income tax system. Although there is support for implementing such a withYstém, there are also great concerns and criticism, no matter how it could be created. In addition, challenges of complete changes in the Tax Code of extremely large countries could be extremely difficult, time consuming and expensive.
The basic way to work a negative income tax system is that people would report their income and pay any taxes, received money or pay taxes, depending on where the level of income was determined. Another model would be simply to grant money to people who were at a low level of income at different intervals to complete their income. There are some things in various tax systems that carry a small similarity to negative income tax.
In the US, low -income people can qualify for earned income credit (EIC). This does not necessarily increase the level of income to a guaranteed minimum amount, but it can help slightly. People who receive EIC, they do not pay taxes and instead receive government payment.
BLAHOBYT is also a negative income tax in some respects. Its aim is to replace a salary that a person has not received. In this way, a minimum amount of money is guaranteed to those who qualify.
criticism selected against any form of negative income tax is that it would encourage people to maintain their income on or under poverty or minimum level. People do not have to work as many hours as they should or could refrain from looking for more lucrative work. This criticism may be accurate or ridiculous depending on where the minimum level of income is determined. It is often commented that the current instructions for the poverty line in places like the US are too low and do not actually provide income that offers life with dignity. Unrealistic instructions with low minimum income are likely to prevent people from trying to stay only at the level of poverty.