GUARANTEED MINIMUM INCOME

income maintenance program administered through the taxation system for which eligibility is determined by income as related to family size. In such programs the provision of a minimum standard of living to every citizen is considered part of the government's general responsibility to provide for the welfare of its citizens. A system of income guarantees has existed in Great Britain since the passage in 1966 of the Supplementary Benefits Act. Similar programs have been proposed in the United States as possible solutions to the gaps in current welfare programs. The systems may follow two broad patterns: social-dividend taxation or negative-rate taxation. In a social-dividend system, each family is entitled by right to certain income payments, which it receives either at specified intervals throughout the year or by subtraction from its tax liability at the end of the year. Under the so-called negative income tax system, there is a critical level of income for each family size at which no taxes are paid and no benefits received. Families with incomes under this established minimum receive income supplements (or negative taxes) equal to part or all of the difference between the minimum standard and their earned income, depending on the particular version of the program. The negative income tax is less costly than the social dividend because it provides payments only to those identified by their income level as poor. Though some supporters view the negative income tax as a replacement for present welfare programs, others see it as complementary to existing programs. The advantages of effecting income transfers through the taxation system include the fact that eligibility is determined on the basis of income, without judgment of the reasons for an individual's poverty, and that the working poor are not excluded because they are employed. Payment in cash, which imposes no particular consumption patterns on the recipient, is generally cited as a major advantage, though commodity payment has been judged preferable in some situations.