Resolved: The USFG should replace its welfare program with a Negative Income Tax

Contention 1: Freedom of Choice For a better explination of the NIT (Negitive Income Tax) is shown above where the simple equation of (Income*0.25)-$10,000 to reveal what the family would owe in taxes each year. For this to come out we can see that the average income in the US is actually $51,939 [1]. This would show and disprove that a great deal of Americans would be receiving this kind of income, but it would still have massive affects on the US financial institute. The United States was founded on the aspect of Democracy and a key aspect of that is the ability to vote. The ability to vote with your money is key as it helps generate economic profits and helps to tell producers what the consumers want and these things are made as a response. A huge problem with Welfare is several of the government programs with it. One of which is SNAP, or more commonly known as Food Stamps. The issue behind SNAP is that it distorts the market by forcing those who recieve them to purchase only healthy foods even though there's a demand for junk foods and other items that are not permitted under SNAP [2]. This forces the market to have to move away from its true equalibrium as under the normal market without SNAP the Demand Curve would shift outwards, but under the status quo, Equalibrium has not been met and there is a market ineffiecency due to the government intervention. NIT would eliminate Food stamps as people would be able to spend their money on whatever they please. This would increase market effiecency as they would buy anything they want and many things they would have been unable to buy under the status quo. Doing this would allow the market to effectively be able to communicate prices and in doing this, people would become more informed as to what to buy and what not to buy based on the increase on prices that would not have occured under the status quo. The reasonsing is that the lack of demand would mean that the product for each set of production would have been bellow what it should have been and the new and actual demand would force these producers to increase production to the market Equilibrium which it should have been. This would cause a rise in prices which would make consumers go to other products and the cycle of increased demand and Equilibrium in the market would persist. Another baffle in the system of welfare has been that of Section 8 Housing. The system started off with good intention, but has began to degrade as waiting lists became longer and the Neighborhoods that they were moved into became poorer and poorer and filled with more and more violence [3]. This has become extremely problematic as people under this program are suppose to be moving away from this. The Bureau of Justice has reported that this poverty in these areas has doubled the crime rates as areas where there is a Medium or rich neighborhood [4]. NIT has been shown to help increase migratory rates as it was shown in the Seattle-Denver Expirament that this rate was 50% higher than normal cities [5]. This has helped increase people moving into better neighborhoods which has not only made them safer, but has created a better living envirnment for them. Contention 2: Welfare TrapOver the years, welfare has been gathering more and more people ensnared in the welfare trap as many found it better to not work and stay in poverty. Much like the "Welfare Queen" who recieves over 1 grand a month on welfare people do not find it reasonable to get off welfare once they begin to recieve benefits. Now we know that not everyone on welfare is as lucky as her nor in the same sitaution. The DoHHH has reported as of 2011, that 23% of the US was on welfare which is the highest that they have ever recorded [6]. Mathematically, a single person on welfare can get up to $1,400 a year while a family of 4 can get $16,800 [7]. Both of these are under the poverty line, but people are still finding ways to survive under this prgram. When people begin to work, they loose their benefits and the only jobs that may take them is those for unskilled labor which might not even equivalate up past their benefit levels which harms the average person on welfare, so they elect not to go and find a job as it would decrease their income. NIT provides an incentive to work while they may still recieve benefits from the government. While on comparrison, at no income, they would recieve $10,000 vs. welfare's $16,800, assuming it's a family of 4, but as the work increases, the NIT stays and they earn additional income while they would normally lose welfare. We could see, using the Phillip's Curve, we can see that by reducing unemployment under this plan it would raise inflation [8]. Normally people would object to this, but we do have to realize that the Federal Reserve is currently trying to get inflation rates back to their normal rates as they are way below expectations as they are only 1.1% [9]. By instigating NIT, more people will have more money and this would increase the amount of money available in the market and people would create more jobs to increase production, effectively reducing employment, creating an endless loop. Under the status quo, many minorities are well under much of the white populace in income. According to a Pew Research on income inequality it has shown that not only is the gap between white and minority income is widening, but the average minority family has an income that is under the average Family 4 welfare that I had brought up earlier [10]. Under the NIT system, the medium Affrican-American family would recieve $7,250 while the Hispanic-American family would recieve $6,575. Both of which would help these families out of Poverty. This is a key thing and would be doing more to help in the "War on Poverty" than the program we currently have. This would help move these minorities out of poverty and begin to create equality in a way as it will help better the US. Sources1. (. http://tinyurl.com...) 2. (. http://tinyurl.com...) 3. (. http://tinyurl.com...) 4. (. http://tinyurl.com...)5. ( . http://tinyurl.com...) 6. (. http://tinyurl.com...) 7. (. http://tinyurl.com...) 8. (. http://tinyurl.com...) 9. (. http://tinyurl.com...) 10. (. http://tinyurl.com...)