Must a rise in wage rates reduce participation in negative income tax programs?
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Must a rise in wage rates reduce participation in negative income tax programs? by John F. Cogan

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Published by Rand Corporation in Santa Monica, Calif .
Written in English


  • Negative income tax,
  • Guaranteed annual wage,
  • Labor supply

Book details:

Edition Notes

StatementJohn Cogan.
SeriesRand paper series -- P-6170, P (Rand Corporation) -- P-6170.
ContributionsRand Corporation.
The Physical Object
Paginationiii, 7 p. ;
ID Numbers
Open LibraryOL13637581M

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A negative income tax, as Friedman saw it, would therefore solve two main problems: It would give people cash as opposed to in-kind benefits and have a much lower tax rate. While people would still lose benefits the more they made, with a negative income tax, they would always come out ahead with a higher : Rebecca Linke.   A report by David Cooper of the Economic Policy Institute, titled Balancing Paychecks and Public Assistance: How Higher Wages Would Strengthen What Government Can Do, finds that raising the federal minimum wage to $12 per hour by would reduce public assistance expenditures by $17 billion annually. The author suggests these savings could be used to strengthen the existing safety net . The income effect of a rise in the hourly wage rate Positive income effect: When higher wages cause people to want to work more hours in order to reach a target / desired income Negative income effect: When a target income has been reached and people prefer spending more time on leisure rather than earning more income.   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.

  Setting a higher minimum wage seems like a natural way to help lift families out of poverty. However, minimum wages target individual workers with low wages, rather than families with low incomes. As a result, a large share of the higher income from minimum wages flows to higher-income families. Other policies that directly address low family income, such as the earned income tax . Minimum Wages: A Poor Way to Reduce Poverty by Joseph J. Sabia, associate professor of economics, San Diego State University In his State of the Union address, President. A. reduce the Hispanic wage rate, increase Hispanic employment, and lower the actual Hispanic-white wage ratio. B. reduce the Hispanic wage rate, decrease Hispanic employment, and lower the actual Hispanic-white wage ratio. C. increase the Hispanic wage rate, increase Hispanic employment, and increase the actual Hispanic-white wage ratio. An increase in marginal tax rates will A) increase the incentive of individuals to earn additional income. B) allow taxpayers to keep more of what they earn. C) reduce the share of additional earnings that individuals are permitted to keep. D) make tax deductible purchases more expensive.

The progressivity of the corporate income tax structure also varies. Today, 31 states tax corporate income at a flat rate. The remaining 16 states have multiple tax brackets. In Alaska, for example, each of ten income tax brackets has a different marginal tax rate. As corporations expand and become multistate operations, deter-.   A higher minimum wage could increase the pay not only for the million workers who earn $ today, but an estimated 17 million workers who make between $ and $ The earned income tax credit is an effective way to reduce poverty. It raises only the after-tax wage rates of workers in low- and moderate-income families, its tax credit increases with the number of dependent children, and evidence shows that it increases labor force participation . Supporters of raising the minimum wage argue that doing so will reduce poverty. It seems intuitive that raising the minimum wage would have this effect. Presumably, requiring employers to pay.