negative income tax

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A negative income tax is a proposed welfare system where people earning below a certain level receive financial support directly from the government instead of paying taxes.

Key features include:

  • Proposed by the economist Milton Friedman.
  • Designed to simplify the complex welfare system.
  • Maintains work incentives by encouraging individuals to earn more income.
  • Establishes a minimum income floor for every citizen through the existing tax process.