Solves every AFF internal link---inequality, automation, unions, innovation, and poverty---but is politically feasible.

Such an NIT is both economically and politically feasible. Within a year of passing, it could eliminate official poverty, increase the circulation of capital throughout the economy, reduce inequality, and insulate a basic degree of livelihood from potential shocks such as loss of employment, automation, pandemics, or changing life circumstances.

In the longer term, a basic income improves the conditions for social innovations to occur alongside technological ones. Raising the economic floor lowers the risks associated with experimental behavior. It lifts everyone towards a threshold of financial security beyond which we have more freedom to decide how to spend our time. This kind of free time, contrasted with time that must be spent working for money, is fertile soil for innovation.

Moving towards collective liberation from the strictures of economic anxiety could provoke an upsurge in the kinds of broader innovation we need to meet the spectrum of challenges facing our civilization. Economic freedom is an intersectional catalyst towards ecological, racial, feminist, and mental freedoms.

I calculate this NIT would cost $855 billion per year. My funding proposal details two primary categories of revenue: reforming and eliminating existing welfare and tax programs ($346 billion), and implementing new progressive taxes ($744 billion). Together, these reach a total funding capacity of $1.09 trillion, $235 billion above my funding estimate. Crucially, the plan does so without raising the tax burden on most Americans.

What Is a Negative Income Tax?

NIT is a targeted basic income that phases out as one’s earnings increase. It’s composed of two variables: an income floor, and a phaseout tax rate. The income floor sets the amount an individual with $0 of annual income receives from the program: the maximum benefit amount one can receive from the NIT.

The phaseout rate determines how much of the NIT is phased out for each dollar of earned income. The lower the rate, the larger the category of people who benefit from the NIT program, and the more work incentives are preserved (because earning additional income loses you less of the NIT benefit). But the higher the programs cost. Conversely, higher rates mean fewer people benefit and incentives for low-wage work are decreased. But the cost is lessened.

Together, the phaseout tax rate and the income floor create a third element: the breakeven point. This is the earnings level at which NIT benefits are fully phased out to $0.

Why a Negative Income Tax

How is it that in a society as wealthy as ours, economic anxiety remains the prevailing reality for so many? This question has vexed economists at least since Henry George in the late 1800’s. In our time, after centuries of vigorous capital accumulation, we are past due to leverage our wealth to provide a basic income that reduces the hold economic insecurities have upon our lives, behaviors, and minds.

NIT is both an economic and politically feasible way to implement this basic income. It’s a policy with immediate and obvious effects, followed by more subtle, and perhaps profound ones.

Within a year of passing, NIT could:

Eliminate poverty by setting the income threshold above the federal poverty line

Reduce inequality and increase the circulation of capital throughout the economy by redistributing wealth from its accumulation at the top back towards lower income groups who are more likely to spend it

Increase the bargaining power of workers by increasing their ability to meet their basic needs outside of employment, empowering them to more readily reject undesirable or exploitative labor contracts

Guarantee and protect a basic degree of livelihood from potential shocks such as loss of employment, automation, pandemics, or changing life circumstances.