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

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

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

  • Robert A. Moffitt
Journal of Economic Perspectives
vol. 17, no. 3, Summer 2003
(pp. 119–140)
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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.

Citation

Moffitt, Robert, A. 2003. "The Negative Income Tax and the Evolution of U.S. Welfare Policy." Journal of Economic Perspectives, 17 (3): 119–140. DOI: 10.1257/089533003769204380

JEL Classification

  • H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
  • I38 Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
  • J12 Marriage; Marital Dissolution; Family Structure; Domestic Abuse
  • J22 Time Allocation and Labor Supply
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