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Negative Income Tax

The Negative Income Tax is an alternative to the socialist welfare state. Under the negative income tax, the poor are given a minimum amount of money to provide for their basic necessities. Unlike traditional welfare programs, the negative income tax distributes benefits inversely proportional to the amount of income a poor family receives from their job. This system prevents the "welfare trap" problem that leads to perpetual poverty, and removes the need for a large bureaucracy that would administer the benefits in typical welfare programs.

Capitalists and the poor like this policy because it reduces interference of the state into the poor's lives and is the most capitalist form of welfare. On the other hand, if the amount of money guarenteed is higher, Capitalists will begin disapproving of the program. The negative income tax decreases socialism and state employees over time because it decreases the need for government control over the economy. Equality and poor earnings will increase the more money is placed into the program.

The drawbacks to this policy is that, if too much money is guaranteed, it will increase unemployment and it will decrease productivity. High income earners will disapprove of the policy as it redistributes their money to those who may or not be working. This policy can also be very expensive.



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