Comment on Hans-Georg Petersen “Pros and Cons of a Negative Income Tax”

  • Lars Söderström


There are many more pros than cons in this paper. Professor Petersen is quite enthusiastic about the negative income tax (NIT) as a substitute for current welfare state transfers in accordance with what he calls the social aid principle (Fürsorgeprinzip). I do not share his enthusiasm. In my view, NIT is both expensive and inefficient.


Disability Pension Unemployment Benefit Housing Allowance Cash Benefit Factor Income 
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  1. Jerger, J., and A. Spermann. 1995. “Alternatives to Subsidize Low-Wage Employment: The Case for a Targeted Negative-Income Tax Solution in Germany.” International Institute of Public Finance 51st Congress, Lisbon, Portugal, August 21–24 (mimeo).Google Scholar
  2. Statistics Sweden. 1992. Socialutgifterna och utgifternas finansiering år 1990. S42 SM 9201. Stockholm: Statistics Sweden.Google Scholar
  3. Swedish Government. 1990. Reviderad Finansplan 1990/1991. Stockholm: Swedish Government.Google Scholar

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© Springer-Verlag Berlin Heidelberg 1997

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  • Lars Söderström

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