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What Are the Strengths and Weaknesses of the Negative Income

question 67

Essay

What are the strengths and weaknesses of the negative income tax (NIT) as an alternative to traditional welfare programs?


Definitions:

Marginal Tax Rates

The tax rate applicable to the last dollar of an individual's or entity's taxable income.

Pre-Tax Loan Rate

The interest rate on a loan calculated before taxes have been deducted.

CCA Class

Refers to the classification of fixed assets under the Canadian Capital Cost Allowance for the purpose of tax depreciation.

After-Tax Lease Payment

The lease payment amount after accounting for the tax benefits or obligations, impacting the net cost to the lessee.

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