What is a negative income tax? What is the purpose of it?

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Negative Income Tax is an idea that come to existance in 1940s by British politician Juliet Rhys-Williams. If we say in one Word this Idea came to help the people who is earning below minimum level of Income. Negative Income Tax is also known as Earned Income Tax Credit or Working TAx Credit.

It is tax system in which poor income workers or empployees are eligible for payment received from Government instead of paying tax. It is kind like generate fund from tax High Level Incomes and distribute some collection to the persons who have lower level of income. This assistance is given by the tax authority of such states to brought up the below income persons up to that minimum level.

As per Milton Friedman Negative Income Tax is good because it would by vastly superior to any other guaranteed annual Income. In minimum cost it would provide maximum support to poor without much interference of bureaucracy.

ekkarill92 answered 1 year ago

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