Negative Income Tax

In the 1960s and 1970s, IRP was deeply involved in the design, conduct, and analysis of a version of the basic income guarantee: the New Jersey Income Maintenance Experiment, followed by the Rural Income Maintenance Experiment. These random-assignment experiments studied the differential behavioral responses to varying minimum income guarantees. The experiments were important to the evolution of experimental methodology in the social sciences as well as to poverty research in general. The New Jersey experiment is regarded as an outstanding example of interdisciplinary research in close cooperation with government planners. In the years that followed, the government conducted additional income maintenance experiments in Gary, Indiana, and in Seattle and Denver (often referred to as SIME/DIME).

This experimental approach to poverty reduction is often called a negative income tax and was the subject of the 2004 Robert J. Lampman Memorial lecture, by Robert A. Moffitt. A version of this lecture, “The Idea of a Negative Income Tax: Past, Present, and Future,” is available in Focus 23:2, (Summer 2004). A full discussion also appears in Robert A. Moffitt, “Milton Friedman, the Negative Income Tax, and the Evolution of U.S. Welfare Policy,” IRP Discussion Paper 1260-03 (2003).

The negative income tax proposals inspired several comprehensive federal plans proposed during the 1970s: President Nixon’s Family Assistance Plan, Senator George McGovern’s Universal Demogrant Proposal, and President Carter’s Program for Better Jobs and Income. Programs to supplement the income of the working poor through the tax system (for example, the Earned Income Tax Credit) are a more recent version of the approach.

Archival Collection

IRP is in the process of collecting documentation, publications, and other study materials from these four negative income tax experiments. To learn more about these social experiments, browse bibliographies, and view our current archival holdings, visit our Negative Income Tax Archive page.

Other Resources

Visit some of these available Web resources on the concept of guaranteed income: