Alleviation from the Welfare State: Use Your Own Freedom With A Reconsideration of the Negative Income Tax

Abstract

Using data from the Consumer Population Survey (CPS) for March 2013, this study examines the potential effects of a negative income tax on federal government welfare expenditure, household income, and certain variable parameters. The negative income tax is defined as money credited as allowances to a taxed income, and paid as a benefit when it exceeds debited tax. This study concludes that a negative income tax makes welfare more expensive to citizens, but should better society. These results shed some light on a non-conventional approach to addressing income distribution and achieving some socially desirable outcomes