Inequality Maximum - What if you do not have work - negative income tax

What if you do not have work - negative income tax

Not everyone has a job. The inequalitymaximum is only concerned with people working that they have a fairer distribution of wealth. Is there a solution to the many people who are in a hopeless situation? The inequalitymaximum will not solve that. There is already a solution and it is called negative income tax, it was promoted by Milton Friedman.

The negative income tax operates as follows. Imagine you have a household of one person. You set the negative income tax to 2,000 euros. People who have no money so a negative income tax of -2000 euro. There is a 50% tax rate. That means that this person will receive 1,000 euros. Suppose you have a person who earns 1,000 euros. Then you have a negative income tax -1 000 euros. Of this, 50% is that this person will receive 500 euros. When someone earns 2500 euros then it has a taxable income of 500 euros. 50% means that this person must pay 250 euros.

In our current system, people complaining who have a benefit: if I want to earn more money I'd better do undeclared work . The current system is telling people if you work then you have to pay your benefits to your agency. This means that benefit recipients will not be better off to go to work. What you'd like is that there is a stimulus to work. This stimulus you can create ideal with a negative income tax.

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