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In economics, a negative income tax (NIT) is a system which reverses the direction in which tax is paid for incomes below a certain level; in other words, earners above that level pay money to the state while earners below it receive money.
Friedman argued further that other advantages of the negative income tax were that it could fit directly into the tax system, would be less costly, and would reduce the administrative burden of implementing a social safety net. [153]
The effects of Capitalism and Freedom were great yet varied in the realm of political economics. Some of Friedman's suggestions are being tested and implemented in many places, such as the flat income tax in Estonia (since 1994) and Slovakia (since 2004), a floating exchange rate which has almost fully replaced the Bretton Woods system, and ...
In 1962, economist and author of "Capitalism and Freedom" Milton Friedman proposed the concept of government subsidies for low-income families. Under this type of tax reform and social policy,...
The idea of Negative Income Tax (NIT) was stumbled upon and discussed by various thinkers and is most commonly attributed to Milton Friedman, who made it more prominent in his 1962 work ‘Capitalism and Freedom’. The theory places itself as an alternative to the contemporary progressive tax systems which are deemed too bureaucratic and ...
Find out what NIT is and how it would affect you if the U.S. adopts it.
The negative income tax (NIT), which Milton Friedman proposed in his 1962 book Capitalism and Freedom, is a type of flat tax. The basic idea is the same as a flat tax with personal deductions, except that when deductions exceed income, the taxable income is allowed to become negative rather than being set to zero.
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