As the US Government's primary job becomes an entitlement provider to its citizens (see above chart, HT: Carpe Diem), it is a great time to consider implementation of Milton Friedman's proposal for a negative income tax.
Friedman's proposal was for an automatic, unrestricted dollar payment to any household with less than a minimum income. The payment would phase out as income increased but at less than a dollar of benefits lost for each dollar of income earned as an incentive to work. The definition of earnings should be expanded in today's world to include the benefits of 401Ks, IRAs, pensions, capital gains, etc.
A negative income tax would eliminate the need for much of the US government's bureaucracy and would provide federal funds to those who need it the most. It would allow families to budget and spend government money as they wished and it would eliminate many unnecessary government programs.
By eliminating the costs of a large bureaucracy, it would allow each federal tax dollar to go much further to help families in need. A negative income tax could also replace Social Security in its entirety.
A single payment entitlement program would enable easier budget balancing, since all recipients would be treated equally and only one program would need modification to reduce a deficit.
A negative income tax can really solve several issues as it would eliminate the need for much of the US government's bureaucracy and would provide federal funds to those who need it the most.
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ReplyDeleteNegative income tax will help to solve your financial problems.In that ces it will also balance your budget too.
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