Milton Friedman - The Negative Income Tax

The exact same thing happened with Reaganomics/Supply Side Economics. The economic brains behind these ideas was Milton Friedman, and while he did strongly and aggressively advocate for supply side economics, he also had quite a lot about to say the consumer side of things and advocate for, among other things, a negative income tax [1] that in practical terms is essentially a basic income that solves many of the major problems with things like welfare. I'm not advocating for a basic income (or supply side economics), but simply emphasizing that what you said is completely true and one of the many risks of MMT. Even if MMT might be theoretically viable, in practice it's going to be interpreted as something not far from a pseudo-intellectual justification for arbitrary levels of debt/monetary inflation. [1] - ▶ this video

>How exactly is this supposed to work? The government prints money and gives it away for free, nobody has to work? Given the tremendous inflation occurring because of non-universal benefits, UBI pretty well died as a subject. Everything the anti-UBI people have said would happen, is happening. So if it were universal, it would be worse than this. Trying to discuss UBI is complex because every single attempt at it has failed. There is a simplistic idea of UBI = $1000/month to every single person. Just start delivering cheques and see what happens? Everyone earns $1000 more and everyone bumps up in the progressive tax and hopefully you tax enough to keep the budget balanced and inflation under control? We know this doesn't work now. MMT is dead as a subject. We must do much more than just free money. Lets look deeper. What if we dismantle every single safety net. Welfare goes away, employment insurance, child benefits, old age pensions, indigenous UBI, etc. These all go away. We take those budgets and combine them and disperse equally. In essence what happens is that from a government budget point of view we aren't broke. At exactly the same time we also make a constitutional amendment requiring the government to balance the budget. What is this exactly? It's a negative income tax that Milton Friedman recommended ages ago.. ▶ this video

In that video there is a mention that Milton Friedman supported basic income. That is wrong! He opposed UBI. He instead proposed NIT(Negative Income Tax)[0]. As an engineer, I think NIT is far more efficient than UBI. UBI is like "spray and pray" policy, whereas NIT provides support to those who actually require it, automatically. [0] ▶ this video

It seems that you are confusing marginal tax rate and effective marginal tax rate. UBI and NIT (Negative Income Tax) are designed to increase incentives. That's why free market economists like Friedman fiercely supported it. Milton Friedman - The Negative Income Tax: ▶ this video

Milton Friedman argued for essentially UBI (he called it "negative income tax") 50 years ago[1]. Unfortunately, selling the American voter on anything "unearned" (I realize the U stands for "universal") that's going to come out of "my taxes" is going to be a long and uphill effort, especially when the mindset of the current administration[2] is in the other direction: > Agriculture Secretary Sonny Perdue says the administration thinks these people should be able to get jobs, especially now that the nation's unemployment rate is the lowest it has been in years. > "People believe that able-bodied people who can work, should work," Tennessee Republican Rep. Scott Desjarlais told Perdue, "Do you have any idea why there might be so much pushback and concerns on this measure?" > "I have no clue," Perdue responded. I don't see how we get from there to: "Universal Basic Income (UBI) is a form of social security that guarantees a certain amount of money to every citizen within a given governed population, without having to pass a test or fulfill a work requirement."[3] Fox News can't even discuss UBI without dismissing it out of hand with contempt and mockery[4]. We've got a ways to go to get back even to GWB's "compassionate conservatism," much less a serious discussion of UBI. I realize how pessimistic I seem. I'm actually pretty excited by some of the current candidates. I think a couple of the candidates[5] have it right when they argue our first priority has to be to restore demo

When people focus on inequality, are they doing so because they love the poor and want to do something for them, or because they hate/envy the rich? Too often, it's the latter. Instead of UBI, a negative income tax is a much better approach. There's a lot of info out there about it, but here's a nice intro: ▶ this video

What I really don't get is, why do everyone advocate for universal basic income, instead of a negative income tax. The negative income tax model achieves the same basic income with less negative motivation for people who want to pursue work at the low-end. It also avoids wastefully paying it to people who don't need it. This is my inspiration : ▶ this video

I haven't listened to this episode yet, but it's worth noting that Milton Friedman was advocating for this very position in the 1960s. Here's the relevant clip from Free to Choose: link And a 1968 clip from an interview with William Buckley Jr.: ▶ this video

I cannot find a "white paper" or policy outline on UBI. I have read OpEds on the subject in the NYT and WSJ and watched Milton Friedman explaining his "negative income tax" on YouTube and that has been the most detailed plan of all.* Therein Friedman explains how welfare would be erased and a cash payout of $3,000 (circa 1968 mind you) to those making no income whatsoever. In todays dollars that figure would be $20,806.29 If the recipient made only $2,000 that year they would receive of a check of $1,000. Is that workable today? The UBI enthusiasts never point to how it is going to get paid. * ▶ this video link

Friedman himself would disagree with you. He supported a related idea - a negative income tax. Hear him describe it here: ▶ this video . This is not a capitalism vs socialism or left vs right issue.

Do you also believe that welfare recipients would not miss welfare payments if they were suspended today, or does "supply and demand" not function presently to neutralize the effect of transfer payments in society? The second bit about people squandering resources has been nicely answered by Friedman in his discussion of negative income tax: it is better to have individual market participants make occasional mistakes than to suffer the greater inefficiencies of central planning [ ▶ this video ].

Milton Friedman was a longtime advocate of a basic income, which in his precise parlance was called a Negative Income Tax. ( ▶ this video ) Leftist politicians have blocked this at several points, alas, although it is probably the most humane and effective method of delivering help to the poor. It also has the advantage of getting more people to, you know, actually file tax returns.

They misunderstand the negative income tax. My understanding is it doesn't require work necessarily. In function, it's a guaranteed basic income. Milton Friedman on Negative Income Tax -- ▶ this video

Which is the point of the deduction. Any work at all is better than sitting around doing nothing. - I'd suggest you check out Friedman's original position. ▶ this video It's elegant.

It's like we are the same person. Or maybe we just live in the same country :) It's worth mentioning that the only libertarian I know who has been able to argue with me to my satisfaction remarkably agrees with me on "what needs to be done." I suspect political philosophy is somewhat like religion: any sufficiently dedicated person can use any sufficiently developed philosophy to support any sufficiently developed plan. Here's my list. What's yours? 1. Campaign finance reform. Turn the bribing policy from "mandatory bribes" to "optional bribes." Going to "no bribes" is probably too difficult (how to close the "cushy job upon retirement" loophole?) 2. Legislative and judicial policy focused on creating competitive markets, not placating business (#1 necessary for #2) 3. Single-payer healthcare 4. Basic income (Milton Friedman: ▶ this video )

I assume this is akin to Milton Friedman's negative tax: ▶ this video I think it's brilliant. The major issue would be how to do a transition to it and what the "magic number" is.

There's still an incentive to work with a negative income tax. This is an interesting discussion about it: ▶ this video

Basic income on top of everything else doesn't make much sense (cost-wise). But if we could trade B.I. for Social Security, Medicare, Medicaid, SNAP, and other social progams-- it would probably be more cost efficient as individuals look after their money better than other people do. Here's a video from Milton Friedman (not Tom Friedman!) who is advocating for a negative income tax-- a variation of basic income. ▶ this video

Milton Friedman was a proponent (an originator?) of the idea of a negative income tax (as opposed to services). The idea of course, is that the problem of being poor is money , not services. Rather than explain it here, you can see him summing it up: ▶ this video

Basic Income isn't Libertarian at all. Friedman wasn't a Basic Income proponent. He was a proponent of negative taxation. He was only interested in being consistent with the way we treat income tax and welfare. He felt that the welfare manager's job of determining exactly how to administer relief to recipients was something that couldn't be done properly. He preferred just giving cash based upon income levels on a sliding scale. ▶ this video Given the abuse of the Welfare system over the half century since Friedman supported negative taxation, I don't doubt that he would have different views and controls for such a system were he alive today. A lot of ideas sounded good 50 or 100 years ago that we have tried but have failed. It doesn't mean we should keep trying them.