Negative income tax plans have the disadvantage of decreasing work incentives in comparison to existing welfare programs without work incentives.

Question

Quizplus · Accepted Answer

Negative income tax plans are designed to provide a guaranteed minimum income, which can actually increase work incentives by ensuring that additional earnings do not result in a loss of benefits, unlike some traditional welfare programs that may reduce benefits as income increases.

Negative Income Tax Plans Have the Disadvantage of Decreasing Work