Milton Friedman - The Negative Income Tax

Source: Firing Line with William F Buckley Jr.

[Mikeisherest]

Milton's very last line summed up the advantage of his "negative" income tax - the poor person under his plan will ALWAYS have an incentive to earn more money no matter how much they are getting from the government. Also, it makes "means testing" irrelevant so it eliminates a large chunk of DC bureaucracy. This exemplifies the brilliance of Milton Friedman.

[zachmorley]

Why isn't television this intelligent anymore?

[ibichillzking]

They're so... civil. Why isn't modern politics like this? What happened to civility, decency, and polite discourse.

[mepemcl]

$3000 adjusted for inflation 1968 to 2014 is $20, 437.24

[susiemacu]

Having been poor -- never on welfare, but on unemployment -- I have to say this idea is brilliant and motivating. I have earned money while on unemployment, reported it, the entire amount was deducted from my unemployment benefits and created a 3 week delay to receiving further unemployment benefits after various phone interviews with UI agents. I was in essence punished for earning a small amount of money which is demotivating and pushes people out of the job market.

[BryceCarmony]

I love the posture, just two guys lounging in chairs in a intense but cordial discussion, idle spinning in their seats as they think. this is the atmosphere of discussion you don't find much anymore.

[MisterMadnessx]

Brilliant.
This was 50 years ago.
What in the hell have we been doing in the meantime?!

[stingerbee]

Think of the billions that would be saved by eliminating all these agencies and just giving people cash.

[amvvantage]

The more I learn about Milton Friedman, the more I see that the things he says are still relevant today. Perhaps more so. Fascinating. Not to mention the politeness and respect shown while debating.

[joemunch]

Back when I did pro bono work, I learned those on welfare "do hair on the side, " or whatever on the side. It's cash, they don't report it, pay no income tax. I did the numbers for one of them, and based on the fact that I did pay income / social security / medicare tax, and she didn't, she had more resources than me. My pro bono work is drastically cut back.

[NYsalsa]

I think this is an idea both progressives and libertarians can agree on

[MrHavk]

Wow. I literally had no idea Friedman supported something like this. This totally changes my view of him. I'm intrigued now.

[buckfan]

I first learned about this doing my senior thesis in 1972. Friedman's essay was written in 1943, as I recall. Even then he predicted the problem with the existing entitlement system and the built-in disincentives to get off the entitlement train. A single parent with minimal job skills had every reason to stay on the program. Getting a low-wage job meant giving up AFDC payments, rent and utility assistance, and food stamps, and meant significantly less disposable income, along with the need for child care, transportation to and from work, etc. No rational person would make that choice, of course. It's been nearly 75 years since he proposed his solution and still we haven't tried it. The % of low-income two-parent families has dropped precipitously since then, and with that the social issues of today have skyrocketed. One has to believe a certain political party has perpetuated this insane system to be seen as the poor person's benefactor and to maintain political power, imho.

[MrCharrrles]

This was 1968! did either of these two ever look young??

[Orf]

14:00 The number of people on welfare has been skyrocketing. Why? Because once they get on welfare, we make it almost impossible for them to get off. In order for somebody who gets on to get off, he or she has to be able to have a really good job, because to get off gradually, to earn a little bit, now doesn't pay...Under a negative income tax you would have people, give people, give the poor people a possibility of getting off gradually. They can earn an extra $100 or an extra $200 and be better off.

[SuperVt]

This is an amazing conclusion to a question that I've raised for more than 35 yrs. Why don't you allow people to work and gradually get off of welfare? Why does the system punish those who are on welfare and want to get off? The gradual reduction in welfare as they make more money until they're able to support themselves only makes sense. Of course, there are those who will cheat and there are those who will double dip, but there are those now. One of the amazing parts to this is Milton Friedman who had this figured out long ago.

[bradbilbo]

I sure miss Buckley. The more I listen to him and Friedman the more I realize we have really lost some great thinkers.

[NotQuiteFirst]

10:45 when you're debating economics during netflix and chill and he gives you that look

[CptTachyon]

Even if people disagree with Friedman, it's sad to see that political discussions on TV back then didn't descend into ranting and raving nearly as much.

[philosopher]

I'm pretty left-wing but I can't disagree with Friedman here his plan for ending poverty is far superior to our current welfare system so long as the benefits are large enough (probably around $20, 000 a year today). It cuts out all the buraeucracy of the current welfare system, a system that was fine for when it was made (mid 20th century) but can't keep up with today's globalization.