It's more of a minimum standard income meant to replace welfare while also encouraging work.
The problem is setting the rebate rate too high - set it too high, and the rebate is too much. Also, you have to implement it along with abolishing standard welfare for it to have its intended result as a social and budget policy.
Say we set the minimum income at 20,000/yr. Everything below 20,000 gets the rebate rate applied, say 50%, and the individual gets a check. Someone that earns $0/yr, for instance, would get $10,000 from the IRS. Someone who earned $10,000 would get a check for [(20,000-10,000).5]=$5,000. Get it? Any income over the minimum income would be taxed as normal.
The idea is to provide enough income as a social safety net (replacing welfare), while providing an incentive to make more. The danger is setting the rebate rate too high, as Nixon apparently did, so that the rebate isn't low enough to provide an incentive.
Interesting idea.
Derek |
