[ScottBurson]

I've also long supported the negative income tax, because it avoids the perverse incentives of the existing system.

BTW, it's not being means-based that causes the existing system to have perverse incentives; the NIT is also means-based by definition. The difference is mathematical: whether the subsidy is a step function of income, or a linear function. Step-function subsidies always create perverse incentives. Unfortunately, they are ubiquitous. I dream of the day when our legislators have sufficient mathematical ability and understanding to select appropriate linear functions instead.

Anyway, I came across a paper explaining why the NIT is a non-starter, politically, in the US. The basic problem seems to be that there are too many people -- especially young single men -- who currently receive no subsidy yet would be entitled to one under the NIT. This group would make the program too expensive.

[Livven]

I've never understood why taxes, benefits etc. all seem to work with step-based functions instead of continuous ones – anyone care to explain that to me? The only theoretical benefit I could see is that it makes/made administration easier, but with everything being automated that surely can't be true nowadays.