As described in the book, "the impetus to do something real" about the problem came from Economists Milton Friedman and George Stigler who, in the mid 1940s, wrote a paper that proposed a guaranteed annual income (GAI) and a negative income tax (NIT).
In addition to the potential negative income tax consequences to the borrower as described above, if a related investor purchases debt at a discount under circumstances that trigger COD income to the borrower, the tax law requires the investor to include the "discount" into income as interest over the remaining term of the debt (so-called "original issue discount") thereby creating potential phantom taxable income to the investor.
In 1962 the libertarian economist Milton Friedman proposed a negative income tax, under which welfare bureaucracies would disappear and the government would simply send checks to people under a certain income level.
The Friedmans' proposal for a negative income tax built on a long intellectual history in support of basic income proposals, including the work of Lady Juliet Rhys-Williams who, in 1942, proposed eliminating a variety of transfer programs and income tax exemptions in the United Kingdom and instead providing every citizen with a basic cash allowance administered through the tax system.
While the phase-in range provides a work incentive, the maximum and phase-out ranges have work disincentives for some families (Horowitz, 2002; see Moffitt (2003) for a history of the negative income tax in U.
95 Hardcover Alternative voices in contemporary economics HD4921 In this collection of 18 articles contributors describe the history, debates, evidence and proposals inherent in a basic income guarantee, including such topics as the shadow of the old Poor Law, early American views on inheritance and equal shares, the guaranteed income movement of the 1960s and 1970s, negative income tax experiments, the perspective of US domestic policy, the concepts of liberal neutrality and work, exploitation, efficiency, welfare reform, back-to-work programs in France, social minima in Europe, and reports of experiences with basic income guarantees in South Africa, Brazil, Belgium.
But we argue, contrary to the thrust of the negative income tax literature, that some welfare policies are best implemented separately because of institutional considerations.
