![Economics 101: Negative Income Tax](https://i0.wp.com/sterlingterrell.net/wp-content/uploads/2017/01/1-50.jpg?fit=636%2C373&ssl=1)
[This is part of the series: The Complete Guide To Economics 101.]
What is a negative income tax?
A Negative Income Tax is when people below a certain income level do not pay taxes. Instead, they are given an income subsidy, a cash transfer payment.
The issue to keep in mind with taxes like this are that people respond to incentives.
Policy should always consider the unintended consequences.