negative income tax

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Negative income tax

A proposal to assist taxpayer with below-subsistence-level incomes. After filing a tax return, such persons would receive a subsidy to bring them up above the poverty level.

Negative Income Tax

A tax system or bracket in which persons with an adjusted gross income below a certain amount receive money from the government. This system intends to bring people out of poverty, or at least to make their situations less difficult.

negative income tax

a proposed TAX system aimed at linking the TAXATION and SOCIAL-SECURITY BENEFITS systems for low-income or no-income members of society. This is done by replacing the separate systems for collecting PROGRESSIVE TAXATION and for paying social security benefits by a single system that links the two together by establishing a common stipulated minimum income level, taxing those above it and giving tax credits to those below it.

Proponents of the negative income-tax system point to its advantages in assisting in the removal of the POVERTY TRAP and in making labour markets more flexible. See SUPPLY-SIDE ECONOMICS.

References in periodicals archive ?
For example, 10 states enjoyed negative tax prices in 2005, including Alaska, North Dakota, New Mexico, Mississippi, Louisiana, West Virginia, and Alabama.
2% YoY in April, which implies that the economy is recovering from the negative tax shock.
Two very divided titles -positive tax rebate is a distinguished headline and is aimed at all those illustrious high earners; the undistinguished negative tax rebate is an unpleasant, often offensive title and this will be used for those who are out of work, claiming housing benefit,or on disability.
As a result, 47 percent of households either pay nothing or qualify for refunds resulting in a negative tax liability - that is, they get back from the government more than is withheld in taxes.
Because of its negative tax treatment, the employer-funded trust has lost popularity.
Massachusetts ranks 34th among the 50 states for its overall tax exposure, with New Jersey at the top of the list with the most negative tax climate, he said.
Following the trial, the district court granted the plaintiff's post-trial motion to augment the jury's award to offset the negative tax consequences that she would incur from receiving the lump-sum back pay award.
To avoid negative tax consequences, individuals should plan ahead and document the election.
One disadvantage of a permanent investment credit is that it distorts the allocation of investment and can easily produce negative tax rates.
Much as we'd all like to freeze development and traffic, the negative tax impact on us must also be considered.
He said he hoped that a negative tax would break the cycle of unemployment and poverty.
These tax credits work like a negative tax that reduces firms' costs of doing R&D.