Friedman’s negative income tax aimed to gut welfare bureaucracies, not eliminate redistribution
Evidence
Friedman conceived of the negative income tax as a way of channeling income redistribution through the federal tax system, thereby eliminating the excessive administrative costs associated with dedicated welfare programs. With each annual tax submission, those whose income fell below a certain threshold would receive a sum of money in return, guaranteeing them an annual basic living wage. By replacing in-kind welfare with the most liquid form of benefit—cash—Friedman thought that the negative income tax would encourage the poor to behave as responsible free market actors. With its minimal but efficient system of redistribution, the negative income tax would bypass the disabling paternalism of the welfare state and undermine the entrenched power base of liberal welfare bureaucrats. It would also eliminate the moral hazards embedded in the old AFDC program—that of promoting nonwork and family breakdown—by extending subsidies to those in low-wage work and intact families. — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 232
Categorization
- DEFINE: Clarifies what the negative income tax actually was and what Friedman wanted it to accomplish—not the abolition of all redistribution, but the dismantling of dedicated welfare administration.
- XREF: Connects to the definitional work of distinguishing real neoliberal doctrines from their caricatures throughout this essay collection. — connects to: Neoliberals sought minimal welfare that avoided legitimizing the welfare state — Jessica Whyte, The Morals of the Market: Human Rights…, 206; The negative tax treats poverty’s symptoms while abandoning inquiry into its causes. — Michel Foucault, The Birth of Biopolitics: Lectures at…, 1069
Broader Connections
- Neoliberals sought minimal welfare that avoided legitimizing the welfare state
#corroborates(0.85) — Jessica Whyte, The Morals of the Market, 206 - The negative tax treats poverty’s symptoms while abandoning inquiry into its causes.
#complicates(0.75) — Michel Foucault, The Birth of Biopolitics, 1069