undefined | Better HN

0 pointsgrandalf10y ago0 comments

This is very interesting. I recall the first time I heard of a basic income proposal... Milton Friedman proposes it, calling it a "negative tax" in his book Capitalism and Freedom.

Some kind of welfare state is always going to be necessary, so the ideal proposal creates an incentive landscape that is both humane and also nudges citizens toward improving skills and working hard.

This is how we'd design a video game if we wanted to encourage socially responsible behavior. It's a silly accident of history that we haven't managed to do that in the real world.

0 comments

1 comments · 1 top-level

DeBraid10y ago

+1 for Milton Friedman who almost 50 years ago described a negative income tax as the Revolutionary Subsidy.

Basic formula for negative income tax is to apply tax rates on the basis of median income. Friedman offers maximum of 50% of median income as the largest possible subsidy.

Assume median income of $50,000. Joe Smith earns $30,000 and therefore has negative income of $20k (median income - actual income). Joe would then receive a negative income tax of 50% his total negative income, or $10,000. The sum of his earned income + negative income tax = $40,000 / year.

More here: https://github.com/DeBraid/investing-notes/blob/master/negat...

j / k navigate · click thread line to collapse