Under a negative income tax plan, the income level at which one neither
pays taxes nor receives supplementary income transfers.
Movement of individuals and families either up or down income
distribution rankings when comparisons are made at two
different points in time. When substantial income mobility is
present, one's current position will not be a very good
indicator as to what one's position will be a
few years in the future.
The amount of one's additional (marginal) earnings that
must be paid explicitly in taxes or implicitly in the
form of a reduction in the level of one's income supplement.
Since it establishes the fraction of an additional dollar earned
that an individual is permitted to keep, it is an important
determinant of the incentive to work.
Transfers that are limited to persons or families with an income below a
certain cut-off point. Eligibility is thus dependent on
low-income status.
A system of transferring income of the poor, whereby a minimum level of
income would be guaranteed by the provision of income
supplements. The supplement would be reduced by some fraction
(less than 1) as the family earned additional income. An
increase in earnings would always cause the disposable income
available to the family to rise.
The level of money income below which a family is considered to be poor.
It differs according to family
characteristics (for example, number of family members)
and is adjusted when consumer prices change.
