Opinion of Friedman's Negative Income Tax
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  Opinion of Friedman's Negative Income Tax
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Author Topic: Opinion of Friedman's Negative Income Tax  (Read 1405 times)
King
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« on: March 01, 2013, 09:17:39 PM »
« edited: March 01, 2013, 09:19:29 PM by King »

http://en.wikipedia.org/wiki/Negative_income_tax

It feels like something both Republicans and Democrats will never support, so it's probably a FS.

We give tax subsidies to the corporate side.  It would be far more noble to do so for the individual.
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FEMA Camp Administrator
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« Reply #1 on: March 01, 2013, 10:34:57 PM »

When I read about it in "Nixonland", it the version the Nixon administration proposed seemed pretty good but for the fact that there was basically a guaranteed X amount of money a month despite doing no work whatsoever, forever. Had Nixon intended to go through with it, it likely could've been a very good reform of the system.

I guess I'll go with "Freedom Idea".
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King
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« Reply #2 on: March 02, 2013, 12:33:39 AM »
« Edited: March 02, 2013, 12:35:24 AM by King »

but for the fact that there was basically a guaranteed X amount of money a month despite doing no work whatsoever, forever.

But the guaranteed X amount grows the more a person makes and doesn't go away because everybody in the country would receive it but higher incomes would just pay it back with other taxes.  As opposed to the current system, which stupidly takes away benefits at ceiling and takes incentive away for working for small raises as you'd make less money.

Their guaranteed X was also proposed to be $1500 dollars for an individual filer, increasing at the rate of inflation... $10,000 today.  A lot more money than TANF and SNAP give the poor.  It's a shame Nixon nor Reagan (who listened to Friedman on everything else) didn't do it.  The real welfare reform this country settled on was far worse for the poor than this plan.

It would also promote people to file their taxes and save a lot of problems in that department.
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Indy Texas
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« Reply #3 on: March 02, 2013, 02:12:40 AM »

We already have an erstaz version of the NIT in the form of the earned income tax credit and the standard deductions.

I think we're never going to get away from at least some in-kind benefits more than we have now because both parties would oppose it for different reasons.

Democrats wouldn't want to enact a policy that would likely result in a lot of Medicaid, food stamp and TANF program workers becoming redundant. (There's not a lot of labor or overhead involved in simply sending everyone a check with no evaluation or follow-ups involved, and this would largely be done solely within the IRS). Republicans wouldn't like it precisely because there would be no strings attached and there would be less overt stigma and shame associated with getting "handouts."
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opebo
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« Reply #4 on: March 02, 2013, 01:06:15 PM »

I have a negative opinion:  it isn't a very effective tool of oppression (subverting the objections of the ruled by offering them a bit more corn-pone), since after all we have plenty of evidence that the whip works as well or better.

From the perspective of the poor - it just keeps them in thrall whereas at least in theory only the most brutal treatment offers them the opportunity of awareness.
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TNF
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« Reply #5 on: March 02, 2013, 01:16:01 PM »

It would encourage low-wage business growth. For the same reasons I oppose the EITC, I oppose an NIT.
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DC Al Fine
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« Reply #6 on: March 02, 2013, 07:58:13 PM »

Freedom Solution. Simplifying the welfare state is an excellent idea.
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Politico
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« Reply #7 on: March 02, 2013, 08:41:24 PM »

Freedom Solution. Simplifying the welfare state is an excellent idea.

This.

I would add that Friedman's NIT still promotes getting off welfare for those who want to achieve more in their life. There is no incentive not to work, unlike welfare prior to 1996.
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politicallefty
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« Reply #8 on: March 03, 2013, 03:28:10 AM »

A lot would depend on how it was structured. How much money is it and what is it replacing in terms of welfare programs? I'd say I'm neutral.
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Torie
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« Reply #9 on: March 03, 2013, 10:23:55 PM »

The negative income tax, like some many of Uncle Miltie's ideas,  is now conventional wisdom, and is actually in place. It is called the earned income tax credit, and it is the way to square the circle - far better than the alternatives. Friedman sometimes got it wrong, as I told him face to face a couple of times, but on this one, he got it right.
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King
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« Reply #10 on: March 03, 2013, 11:08:10 PM »

The negative income tax, like some many of Uncle Miltie's ideas,  is now conventional wisdom, and is actually in place. It is called the earned income tax credit, and it is the way to square the circle - far better than the alternatives. Friedman sometimes got it wrong, as I told him face to face a couple of times, but on this one, he got it right.

Yeah, but the earned credit rarely pays out.  It just prevents the poor from having to pay income tax.

Now, if we expanded the credit and lowered bottom brackets, we'd be talking.
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Snowstalker Mk. II
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« Reply #11 on: March 07, 2013, 07:19:54 PM »

Good in theory, but in practice simply endorses cheap labor, which in turn encourages total state reliance.
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