I used to love the negative income tax, and I still have a special place for it in my heart.

Except, as I've come to think, it has two really fatal flaws. (Please don't take this as criticism of your idea. I love it, in the sense that I still think that IF it were possible, it would a huge improvement).

The main problem is, you can't actually get it.

It always assumes to be a replacement for ALL OTHER FEDERAL TAXES. I yelled that, like an old guy experiencing a computer for the first time, because it's so important as a corollary to the Negative Income Tax Comment.

If it is put into place as just another system of taxation among others (i.e. exactly what happened with the AMT that we have now), then it's worse than a tax increase. It's a tax increase plus a spending increase.

The problem is that it's politically impossible to sell it to either side of the ideological spectrum. Republicans hate it because it can incentivise less productivity, in order to game out the system and fit into one of those brackets. It also enshrines a permanent welfare system with absolutely no end-point or limits as to how long a person can stay on it until they must get a job. Republicans would never, ever go for that.

And democrats don't like it because of the unspoken assumption that this would be a replacement for ALL other forms of federal taxation (no more gift tax, estate tax, capital gains, tax, and so on and so forth, etc....).

That just would never, ever, ever fly for that side of things.

Which is sad because on a smaller scale, it could probably work and work well.

In fact, in modern kibbutzim in Israel, for the kibbutzum that haven't either totally privatized, or totally retain the old system, many of them are instituting things along these veins and although the results are mixed, it hasn't been as devastating as some have said it would be....but that's likely because it can only work, optimally, in a small community.

But the fact that you are bringing it up is amazing because half the battle is getting people to think outside the box on taxation, because that gets them thinking about what taxes really ARE, WHY we should or shouldn't have them, and how and why they should be apportioned the way they are.

And that's the first step to making a real substantial difference, I think.