Wouldn’t it make more sense to, like, have the first 12k dollars tax free and then increase the percentage for everything exceeding this threshold?
The more money you earn, the more taxes you can afford to pay. Especially when you earn only little money this is important for you to survive, while $100k/yr managers could easily afford to pay 50k of those in taxes
A negative income that is better than that. It says, if you’re working, but only making $12k, the state will give you money so you now have $20k. (Not real numbers.)
The idea is that it incentivizes participation in the work force, with hopes that the extra money helps you get stable and move up the payscale where you may stop needing the external support.
How does that incentivizes workforce participation? You’re giving them money to not work, I think graduated taxes should just not have the NIT portion.
No. If you reported $0 in income on your taxes, you get nothing. There’s a minimum income to get anything back. So if you don’t work, you get nothing, so you are incentivized to find a job of some kind.
But that minimum should be quite low and attainable.
Wouldn’t it make more sense to, like, have the first 12k dollars tax free and then increase the percentage for everything exceeding this threshold? The more money you earn, the more taxes you can afford to pay. Especially when you earn only little money this is important for you to survive, while $100k/yr managers could easily afford to pay 50k of those in taxes
A negative income that is better than that. It says, if you’re working, but only making $12k, the state will give you money so you now have $20k. (Not real numbers.)
The idea is that it incentivizes participation in the work force, with hopes that the extra money helps you get stable and move up the payscale where you may stop needing the external support.
How does that incentivizes workforce participation? You’re giving them money to not work, I think graduated taxes should just not have the NIT portion.
No. If you reported $0 in income on your taxes, you get nothing. There’s a minimum income to get anything back. So if you don’t work, you get nothing, so you are incentivized to find a job of some kind.
But that minimum should be quite low and attainable.
Ah got it.
NIT is specifically letting people start in a refund position. 0 income gets the largest total refund.