Milton Friedman: "Under a negative income tax you would give people, the poor people, a possibility of getting off gradually. They can earn an extra $100 or $200 and be better off."
I was surprised to learn Friedman supported some forms of welfare. His proposal was about putting money in the hands of those who need it, and giving them agency over how to spend their money. He wanted to consolidate multiple government welfare programs under the IRS to eliminate administrative waste. He also wanted to make it easy for the impoverished to work to better their situation, without losing their benefits all at once (unless their income jumped enough to make that worthwhile).
The idea seems brilliant. It is simply an extension of progressive taxation. The bottom brackets just end up earning additional income from the IRS as a consolidated form of welfare.
<15 minute video interview from 1968 where Friedman discusses the negative income tax: https://youtu.be/xtpgkX588nM?si=KJU71FAzFWcWJqun
Posted by FrontLongjumping4235
4 Comments
The number 0 might not be magical economically, but it is politically.
Most of Friedman’s ability to sway policy—insofar as it existed at all—came at a time after public sentiment had soured on things like welfare (y’know…*southern strategy* and all)
I always wondered if Friedman secretly hated this idea, but just thought it was an improvement on the patchwork of social programs we have (SNAP, TANF, etc).
If I had my druthers, we’d have 3 programs: disability, unemployment, and EITC. No cliffs, and they all pay in cash.
The EITC would be expanded and would be payable on a per-paycheck basis.
Isn’t this basically UBI?