A proposal for a guaranteed minimum income by negative rates taxation

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Virginia Polytechnic Institute


This thesis sets forth a guaranteed minimum income proposal which would close part of the "poverty gap"--the gap between the income of poor families and individuals and the income they need in order to maintain a standard of living above the poverty level. The proposal, called negative rates income taxation, combines into a single program the giving and taking of income by the federal government. The negative income tax proposal is distinguished from other guaranteed income programs in two primary respects: (1) the focus on filling part of the poverty gap, that is, a marginal tax rate (negative) of less than 100 per cent; and (2) the emphasis upon income in relation to family size in determining whether an individual or family is eligible for allowances. This means that the benefits of the plan are income-based rather than being based upon such present characteristics as age(OASI), occupation (farm price supports), status (veterans benefits), etc.

The scope of the thesis attempts to cover the various subjects related to the negative income tax, although this is an almost impossible task. For example, subjects such as early utopian ideas, past federal legislation, and present socio-economic problems are related to the concept of the proposal, Also, the principles of negative taxation, the cost and administration of the plan. and economic results of the plan are vital to appraising its applicability.