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Economics 101: Negative Income Tax | SterlingTerrell.net

Economics 101: Negative Income Tax


What is a negative income tax?

A Negative Income Tax is when people below a certain income level do not pay taxes. Instead, they are given an income subsidy, a cash transfer payment.

The issue to keep in mind with taxes like this are that people respond to incentives.

Policy should always consider the unintended consequences.