The Negative Income Tax and the Evolution of U.S. Welfare Policy

43 Pages Posted: 9 Jun 2003 Last revised: 25 Aug 2022

See all articles by Robert A. Moffitt

Robert A. Moffitt

Johns Hopkins University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: June 2003

Abstract

The negative income tax proposed by Milton Friedman represents one of the fundamental ideas of modern welfare policy. However, the academic literature has raised two difficulties with it, one challenging its purported work incentives and the other suggesting the possible superiority of work requirements. In addition, work requirement approaches have gained ground in actual U.S. welfare policy over the last 30 years and the number of different programs has proliferated, another development counter to the negative income tax. On the other hand, the Earned Income Tax Credit has produced a negative-income-tax-like program on a vast scale.

Suggested Citation

Moffitt, Robert, The Negative Income Tax and the Evolution of U.S. Welfare Policy (June 2003). NBER Working Paper No. w9751, Available at SSRN: https://ssrn.com/abstract=414249

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