Published Wednesday, December 27, 2006 by Henry Hazlitt
Henry Hazlitt advocated the "negative income tax" long before Milton Friedman, but later realized the problem with the idea. It is either inadequate at the lower end or excessive at the higher end. The unpalatable truth seems to be that whenever we try to "increase incentives" by reducing a relief payment by less than a dollar for every additional dollar of self-earnings, we solve an immediate problem at the cost of building up a bigger problem for the future. And the negative income tax has created a problem indeed, and politics has so far forestalled a solution.
(Original Text)
Fallacies of the Negative Income Tax (5.77 MB)