Talk:Negative income tax

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[edit] Criticism

It seems to me that some account of more serious criticism of the negative income tax needs to be represented. There must be scholarly literature on the effect on the concentration of wealth such a proposal would certainly have, as well as the deskilling effects. Not to mention the massive budget deficits it would create in (at least) the short term! Most importantly, any proposal that favors the creation of low-wage work to the extent of this kind of negative tax would certainly have a massive effect on the labor market. "Capital intensive" industries alone aren't the issue..."human capital" is also involved here.

An example of the problem (not just in this article, but to some degree in the larger discussion of this topic): The link at the bottom to a "critique of negative income tax" in fact critiques an entirely different model of the tax--one which does *not* include the guaranteed minimum income but instead implements a negative proportional tax (i.e. one phased in according to a "negative tax schedule"--a tax credit). This is not a critique of the model presented here, but a critique of an entirely different model of taxation.

A real critique would involve some realistic assessment of the net effects of the model that is actually presented here. K McG

Where did the first description of the NIT come from? Friedman and the critique use the model I posted just now.

"There must be scholarly literature on the effect on the concentration of wealth such a proposal would certainly have, as well as the deskilling effects. Not to mention the massive budget deficits it would create in (at least) the short term! Most importantly, any proposal that favors the creation of low-wage work to the extent of this kind of negative tax would certainly have a massive effect on the labor market." I am not certain I follow. "Massive budget deficits"? Doesn't that make a lot of assumptions about what the rates would be? Are the precise 25% and $10,000 number integral to the proposal, or place-holders? I thought this proposal was a type of taxation, not a rate. Also I don't really know what "deskilling" means. Boris B 22:46, 25 August 2006 (UTC)

"Friedman feared high subsidy rates as those" ... did the author mean 'Friedman feared higher subsidy rates than those....'? "A flat rate income taxation with tax exemption implements a negative income tax as well as it maintains an actual tax rate progression at extremely low administrative cost: This is achieved by paying a tax on the tax exemption to all taxpayers, e.g. in monthly payments." I really don't understand the last sentence but I'm not sure how to phrase a question. Is the "with tax exemption" language a modification to the NIT proposal, or an integral part? I didn't think you needed to tax any tax exemption to get an effective tax rate progression. Boris B 22:56, 25 August 2006 (UTC)

[edit] Can someone please clean up the terminology?

When the government can and does take my money, that is a 'tax'. When the government can take my money but doesn't for some reason, that's a "tax exemption". When the government gives me back some of the money it took from me, that's a "tax credit". Naturaly, this means the government cannot tax me for more than what I have, it cannot exempt me from more than what it would otherwise take and it cannot credit me for more than what it has taken.

Yet, according to this article, a tax can be applied to a tax exemption, a tax exemption is the same as a tax credit and a tax credit can not only be greater than the amount taxed but greater than what I had in the first place. (Oo) —The preceding unsigned comment was added by TheNightFly (talk • contribs).

I think the term would change to "subsity" once a tax credit returned more then what was taxed. Morphh ^(talk) 13:25, 17 October 2006 (UTC)

[edit] Would be great if someone had sources or even a date for the Nixon references

The article says it came close to passing under Nixon. Which year? Can we get a citation? Was this actually proposed by the Nixon administration, or does "under Nixon" mean he happened to be in the White House, but didn't support the legislation?