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negative income tax
noun
- a system of income subsidy through which persons having less than a certain annual income receive money from the government rather than pay taxes to it.
Example Sentences
Free-market economist Milton Friedman proposed in 1962 the “negative income tax,” a version of the basic-income idea, as a replacement for public social welfare programs.
But, Mr. Rector said, previous experiments in cash assistance, like a “negative income tax” program for the poor in the 1970s, showed employment reduction and negative impacts on marriage that lasted long after the efforts ended.
Since the credit is refundable, meaning that it can exceed the federal income taxes owed, the result for many families is a negative income tax rate.
President Nixon proposed replacing the entire welfare system with the Family Assistance Plan that would have operated almost like a negative income tax to put an income floor below low-income families.
These include Alaska’s Permanent Fund, which has distributed money from the state’s oil boom since 1982; a casino dividend for members of North Carolina’s Eastern Cherokee Band of Indians starting in 1997; and 1970s experiments in “negative income tax” that provided low-income families in the U.S. and Canada with a guaranteed income via tax credits.
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