Volume 13, Number 3 (Summer) 1978
Gottschalk, Peter T. 1978. "Principles of Tax Transfer Integration and Carter's Welfare-Reform Proposal." Journal of Human Resources 13(3):332-348.
While considerable attention has been paid to the transfer characteristics of a negative income tax, much less attention has been given to the tax implications of this type of welfare system. This paper looks at the general theoretical links between the tax system and two types of negative income tax systems: one that insures a smooth transition from transfer recipient to taxpayer and one that allows transfer recipients to be taxed. Elements of President Carter's "Program for Better Jobs and Income" are then explored to determine the quantitative importance of the problems suggested by the theoretical analysis.
The author is Assistant Professor of Economics, Bowdoin College. The conceptual work on this article was done while the author held a Brookings Economic Policy Fellowship in the Office of Income Security Policy ASPE/HEW. I would like to thank Donald Bartlett, Martin Dooley, David Lindeman, Sally Montgomery, John Palmer, Charles Seagrave, and Howard Tuckman for their help and advice on earlier drafts. The views expressed are not necessarily shared by them or by the Department of Health, Education, and Welfare.
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