{"insight":{"id":"102567891","lede":"In this model, optimal welfare is determined using Kolm's social welfare function.","slug":"for-a-number-of-european-countries-a-micro-econometric-model-finds-that-a-negativ","title":"For a number of European countries, a micro-econometric model finds that a negative income tax financed via a flat-tax maximizes social welfare.","showTitleAsQuote":null,"epistemicStatus":"econometric","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"negative-income-tax","name":"Negative Income Tax (NIT)","id":"23932842","lede":"

Negative Income Tax (NIT) is a form of basic income that phases out as recipient earned income rises. NIT is composed of an "income floor" and a "phaseout rate". The income floor is the amount of cash a recipient with $0 of earned income receives. The phaseout rate is how much the cash benefit is decreased per additional dollar of earned income.

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For example, consider an NIT with an income floor of $13,000 and a phaseout rate of 50%. A citizen with no income would receive $13,000 per year, often broken up into monthly payments. If the citizen gets a part-time job and begins earning $20,000 per year, they would still receive $3,000 per year in NIT benefits.

\n","ledeExcerpt":"Negative Income Tax (NIT) is a form of basic income that phases out as recipient earned income rises. NIT is composed of an \"income floor\" and a \"phaseout rate\". The income floor is the amount of cash a recipient with $0 of earned income receives. The phaseout rate is how much the cash benefit is decreased per additional dollar of earned income.\n\nFor example, consider an NIT with an income floor of $13,000 and a phaseout rate of 50%. A citizen with no income would receive $13,000 per year, often broken up into monthly payments. If the citizen gets a part-time job and begins earning $20,000 per year, they would still receive $3,000 per year in NIT benefits.","featured":null},{"slug":"safety-net","name":"Safety Net","id":"102567776","lede":"

The safety net refers to government programs that unconditionally assure a minimum amount of welfare that no citizen can fall below.

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Examples of safety net programs include SNAP benefits (food stamps), Medicaid, and basic income.

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By way of example, imagine a tight-rope strung across a deep chasm. If falling to the ground poses danger, a safety net is strung to catch anyone who falls, mitigating the danger.

\n","ledeExcerpt":"The safety net refers to government programs that unconditionally assure a minimum amount of welfare that no citizen can fall below.\n\nExamples of safety net programs include SNAP benefits (food stamps), Medicaid, and basic income.\n\nBy way of example, imagine a tight-rope strung across a deep chasm. If falling to the ground poses danger, a safety net is strung to catch anyone who falls, mitigating the danger.","featured":null},{"slug":"stability","name":"Stability","id":"23916385","lede":"

We define stability as the resiliency, robustness, and constancy of our nested social, financial, and environmental systems. Stability is the degree to which our systems can withstand stress and maintain their functionality over time.

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Why do we need stability? All else equal, a stable society is preferable to an unstable society. Stability - the product of the harmonious interaction between parts, or interwoven systems - protects against uncertainty and decay. For example, a healthy body regulates its blood glucose levels to provide cells with their required energy. Too much glucose makes cells sticky, with a paralyzing effect. Too little glucose starves them. What's important is the constancy of glucose regulation within functional limits, and the resiliency to maintain this regulation amidst adversity.

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Instability occurs when systems transgress functional limits, causing the breakdown of other systems and suffering for those who depend on them. When interlocking systems remain stable, they provide a fertile foundation for positive expectations that fuel investments in progress and broad cooperation throughout society.

\n","ledeExcerpt":"We define stability as the resiliency, robustness, and constancy of our nested social, financial, and environmental systems. Stability is the degree to which our systems can withstand stress and maintain their functionality over time. \n\nWhy do we need stability? All else equal, a stable society is preferable to an unstable society. Stability - the product of the harmonious interaction between parts, or interwoven systems - protects against uncertainty and decay. For example, a healthy body regulates its blood glucose levels to provide cells with their required energy. Too much glucose makes cells sticky, with a paralyzing effect. Too little glucose starves them. What's important is the constancy of glucose regulation within functional limits, and the resiliency to maintain this regulation amidst adversity.\n\nInstability occurs when systems transgress functional limits, causing the breakdown of other systems and suffering for those who depend on them. When interlocking systems remain stable, they provide a fertile foundation for positive expectations that fuel investments in progress and broad cooperation throughout society.","featured":true},{"slug":"welfare","name":"Welfare","id":"23933425","lede":"

Welfare refers to government-sponsored assistance programs intended to ensure that all members of society can meet their basic needs. Examples include social insurance, Medicaid, and disability insurance.

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The vast majority of welfare spending goes to those who cannot actively participate in the labor market, including children, the elderly, and the disabled.

\n","ledeExcerpt":"Welfare refers to government-sponsored assistance programs intended to ensure that all members of society can meet their basic needs. Examples include social insurance, Medicaid, and disability insurance.\n\nThe vast majority of welfare spending goes to those who cannot actively participate in the labor market, including children, the elderly, and the disabled.","featured":true}],"sources":[{"id":"102567768","lede":"A microeconometric model of labor supply for a sample of Southern, Central, and Northern European countries is used to compare the welfare function effects of various forms of basic income, negative incomes taxes, and conditional welfare programs. A general negative income tax is optimal in terms of welfare maximization, followed by unconditional basic income, and lastly, in-work-benefit policies as is the norm in the US today.","link":"http://www.ecineq.org/milano/WP/ECINEQ2018-454.pdf","slug":"the-case-for-negative-income-tax-with-flat-tax-in-europe-an-empirical-optimal-tax","kind":"Academic Paper","title":"The Case for Negative Income Tax with Flat Tax in Europe: An Empirical Optimal Taxation Exercise","year":"2018-01-01","researchers":[{"id":"102567765","location":"Luxembourg Institute of Socio-Economic Research","name":"Nizamul Islam","seoDescription":"","slug":"nizamul-islam"},{"id":"102567767","location":"University of Torino / IZA","name":"Ugo Colombino","seoDescription":"","slug":"ugo-colombino"}]}]}}