Keeping it Simple | Ep. 25: Transitory or Purgatory?
Keeping it Simple with Simplify Asset Management
00:00
The Negative Income Tax Dynamic of Milton Friedman
The earned income tax credit allows people to work for less than a minimum wage or less than a living wage because the government will subsidize them through an income tax credit. The other side of that equation is the negative income tax dynamic of Milton Friedman right so if you actually are incapable of generating enough to pay income they will give you a negative income tax refund to build you up again. Most economic models assume this aggregate thing called labor and fail to consider the differential skill sets the differential geographies etc. If the government creates this incentive and provides it in West Virginia and in California then there's very little incentive for me to pick up and move from California to West Virginia.
Play episode from 55:34
Transcript
