Negative Income Tax

Negative Income Tax (NIT) is a social welfare system designed to support low-income individuals or families. Instead of taxing income, the government provides financial assistance to those earning below a certain threshold. For example, if a person earns less than the minimum income level, they receive a payment that supplements their earnings. This system aims to reduce poverty and incentivize work, as people still receive support even if they earn a low income. NIT can simplify welfare programs by combining various assistance forms into one payment mechanism, helping ensure a basic standard of living for everyone.