negative income tax


Definition of negative income tax

: a system of federal subsidy payments to families with incomes below a stipulated level

Examples of negative income tax in a Sentence

Recent Examples on the Web Instead, her five-party coalition wants to look into a negative income tax, whereby low income earners would stop paying taxes to the government and instead receive a payment. Kati Pohjanpalo,, "Finland’s Landmark Trial Finds Basic Income Brings Happiness But Not Jobs," 5 May 2020 Relaxing the $15/hour minimum wage the country is moving towards and creating a negative income tax or a negative wage tax could be effective ways of doing this, Brooks said. Nihal Krishan, Washington Examiner, "Arthur Brooks: The government can't make you happy," 30 Apr. 2020 In 1968, Milton Friedman discussed his proposal for a negative income tax. Washington Post, "Universal Basic Income," 29 Oct. 2019 Milton Friedman proposed a negative income tax in his 1962 book Capitalism and Freedom. Matthew Continetti, National Review, "A UBI Would Undermine Work," 25 July 2019 That effectively makes Tlaib’s proposal a basic income, or at the very least a kind of negative income tax (a term used for variants of basic income that phase out with earnings, rather than remaining constant for everyone). Dylan Matthews, Vox, "Rashida Tlaib wants to give low-income adults $3,000 a year each, no questions asked," 12 June 2019 But a good basis is the negative income tax, which subsidises workers below an earnings threshold, while taxing those above it. The Economist, "Capitalism needs a welfare state to survive," 12 July 2018 In more modern times, Milton Friedman, darling of laissez-faire economics, embraced the idea of negative income taxes that put cash in the hands of the poorest people. Peter S. Goodman, New York Times, "Free Cash to Fight Income Inequality? California City Is First in U.S. to Try," 30 May 2018 Economists favour wage subsidies, such as Milton Friedman’s proposed negative income tax, which influenced the design of America’s earned-income tax credit. The Economist, "If wages are to rise, workers need more bargaining power," 31 May 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'negative income tax.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of negative income tax

1950, in the meaning defined above

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The first known use of negative income tax was in 1950

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Cite this Entry

“Negative income tax.” Dictionary, Merriam-Webster, Accessed 15 Aug. 2020.

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