A Guaranteed Income for Every American Would Eliminate Poverty — and it Wouldn't Destroy the Economy

Eliminating poverty seems like an impossibly utopian goal, but it's actually pretty easy: we can just give people enough money that they're above the poverty line. That idea, known as a basic income, has been around forever, but it's made a comeback in recent years.

And it's a sign of how far it's come that opponents of the idea are beginning to feel the need to make arguments against it. Pascal-Emmanuel Gobry, in The Week, is the latest to present a case against, and grounds it almost entirely in the findings of a series of experiments on a variant of the basic income known as a "negative income tax" conducted in the 1970s, which he says show the idea is doomed to failure.

Not so fast — the experiments raise valid worries, but they hardly herald doom, and still suggest that a negative income tax could eliminate poverty at a manageable cost.

A negative income tax isn't precisely the same thing as a basic income, but it's related: after giving everyone a cash grant, an NIT rapidly taxes it away, such that the vast majority of taxpayers get no money back at all. For example, Richard Nixon, during his first year as president, proposed a negative income tax that would pay around $10,000 in 2014 dollars to a family of four, and then tax it away at a 50 percent rate until families earning above $20,000 or so stopped getting anything at all.