NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Negative Income Tax and the Evolution of U.S. Welfare Policy

Robert A. Moffitt

NBER Working Paper No. 9751
Issued in June 2003
NBER Program(s):   PE

The negative income tax proposed by Milton Friedman represents one of the fundamental ideas of modern welfare policy. However, the academic literature has raised two difficulties with it, one challenging its purported work incentives and the other suggesting the possible superiority of work requirements. In addition, work requirement approaches have gained ground in actual U.S. welfare policy over the last 30 years and the number of different programs has proliferated, another development counter to the negative income tax. On the other hand, the Earned Income Tax Credit has produced a negative-income-tax-like program on a vast scale.

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Published: Moffitt, Robert A. "The Negative Income Tax And The Evolution Of U.S. Welfare Policy," Journal of Economic Perspectives, 2003, v17(3,Summer), 119-140.

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