Guaranteed minimum income plans are either a 100% tax, when literally, all get a minimum income of say $20k, if you earned less than $20k, you don’t keep any of those earnings. Practical, still left of center plans do change this to a more modest 50% clawback rate similar to welfare/EI. The most famous NIT proposal had a 50% tax rate on the lowest income. That is the exact same as the flawed GMI plans.
That sounds like a great way to do a poverty trap when you could simply add 20k-reported income to their account. It’s entirely unnecessary to the concept of an NIT.
When you say a tax rate of 50-100 percent, are you referring to the negative tax rate?
Guaranteed minimum income plans are either a 100% tax, when literally, all get a minimum income of say $20k, if you earned less than $20k, you don’t keep any of those earnings. Practical, still left of center plans do change this to a more modest 50% clawback rate similar to welfare/EI. The most famous NIT proposal had a 50% tax rate on the lowest income. That is the exact same as the flawed GMI plans.
That sounds like a great way to do a poverty trap when you could simply add 20k-reported income to their account. It’s entirely unnecessary to the concept of an NIT.