Guaranteed minimum income plans are either a 100% tax, when literally, all get a minimum income of say $20k, if you earned less than $20k, you don’t keep any of those earnings. Practical, still left of center plans do change this to a more modest 50% clawback rate similar to welfare/EI. The most famous NIT proposal had a 50% tax rate on the lowest income. That is the exact same as the flawed GMI plans.
That sounds like a great way to do a poverty trap when you could simply add 20k-reported income to their account. It’s entirely unnecessary to the concept of an NIT.
If you mean 50% tax bracket for the poor, yes it is a poverty trap. UBI is an improvement over welfare and employment insurance because it doesn’t trap people into not working due to high clawbacks. There is also administration and annoyance savings from not policing/applying for benefits.
When you say a tax rate of 50-100 percent, are you referring to the negative tax rate?
Guaranteed minimum income plans are either a 100% tax, when literally, all get a minimum income of say $20k, if you earned less than $20k, you don’t keep any of those earnings. Practical, still left of center plans do change this to a more modest 50% clawback rate similar to welfare/EI. The most famous NIT proposal had a 50% tax rate on the lowest income. That is the exact same as the flawed GMI plans.
That sounds like a great way to do a poverty trap when you could simply add 20k-reported income to their account. It’s entirely unnecessary to the concept of an NIT.
If you mean 50% tax bracket for the poor, yes it is a poverty trap. UBI is an improvement over welfare and employment insurance because it doesn’t trap people into not working due to high clawbacks. There is also administration and annoyance savings from not policing/applying for benefits.