You do not earn over a set level and you get a supplement from the government.
You earn over a set level and you do not get a supplement from the government.
That is the negative income tax
What has been the real net salary from taking your income from below the set level to above the set level?
What you have been paid in salary, less the supplement you will now not get.
That is not the best way to get people to go out of bed to earn a living.
That means that for you who want to get up of bed to work, to earn more, you then need to earn a salary that includes making up for what you will lose in supplements.
That means you might ask for a salary above your productivity and so the job will not be there for you… just like when a minimum wage is imposed, and many jobs that cannot afford to pay that minimum wage, disappear.
I know those who when discussing basic universal income propose a negative income tax approach, do so out of the very good intent of making the universal basic income seem more fiscally viable. But, in doing so, they are in fact subverting the primary reason for a Universal Basic Income, which is to be there helping to you take whatever job opportunities there might be. Sort of lowering the low hanging fruit for you.
That critical battleground, that no man's land, between jobs being created and jobs disappearing, does not need to be distorted by generals at their desks… that should solely be an area where sergeants with true and real combat experience under fire lead.
In short, better to have a low real universal basic income that can take us forward, than a higher pseudo universal basic income based on a negative income tax that could stop us... and keep us too much in bed... we know it is important to walk.
