The Negative Income Tax

[MachineGhost]

The negative income tax is an interesting alternative to the Citizen's Dividend.  In the below video from 1968, Milton Friedman is interviewed by William F. Buckley, Jr. about it:

https://www.youtube.com/watch?v=xtpgkX588nM

Enough momentum was generated on the concept that Tricky Dick actually mentioned a guaranteed income proposal in one of his addresses to the nation in 1969:

http://www.presidency.ucsb.edu/ws/?pid=2191

...and a proposal ("Family Assistance Plan") -- with a work requirement to appease whites and keeping all other income transfer programs intact -- almost made it out of Congress under his watch:

[quote=http://millercenter.org/president/biogr ... ic-affairs]He also proposed a massive overhaul of federal welfare programs. The centerpiece of Nixon's welfare reform was the replacement of much of the welfare system with a negative income tax, a favorite proposal of conservative economist Milton Friedman. The purpose of the negative income tax was to provide both a safety net for the poor and a financial incentive for welfare recipients to work.[/quote]

But, a Senate committee killed it:

[quote=http://www.usbig.net/papers/055-neuberg-NITX.doc]However, in the Senate Finance Committee, ranking Republican Williams (Delaware) firmly opposed the FAP welfare reform approach and Chairman Long (D, Louisiana) played an ambiguous role. A modified version of the House bill suffered a 10 to 6 Senate Finance Committee defeat (with Long voting for the bill) on November 20, 1970 and no version of FAP ever reached the Senate floor during the 91st Congress.
[/quote]

[Pointedstick]

We already have an effective negative income tax for people who are poor enough. Even more if you count the welfare programs.

[MachineGhost]

We already have an effective negative income tax for people who are poor enough. Even more if you count the welfare programs.

No, you have to have "earned income" to get the EITC tax credit.  I think that actually did pass out of the deliberations over the FAP.

And welfare also requires work to be able to get it.  Come to think of it, I'm not sure what welfare from the state actually is anymore.  It's not SSI -- that's Federal.  It's not EBT -- that's Federal.  It's not SSDI -- that's Federal.  It's not Medicaid -- that's Federal.  It's not Medicare -- that's Federal.  They each have their own separate means testing for qualifying.  What actually did the Republicans "reform" in the late 90's???  Drawing a blank.

A basic income would go to anyone, whereas a minimum guaranteed income would go to those that pass means testing.  So a negative income tax is more like a basic income which is the Citizen's Dividend.

[jafs]

Medicaid is a combined federal/state program, with very loose federal guidelines, which gives states a lot of latitude in how to structure their programs.

That's why the guidelines are so different from state to state.