Have the 1996 Welfare Reforms and Expansion of the Earned Income Tax Credit Eliminated the Need for a Basic Income Guarantee in the United States?

In the United States, a Basic Income Guarantee faces a difficult barrier—the popular view that welfare should be tied closely to employment, and the perception that the 1996 welfare reforms and the Earned Income Tax Credit (EITC) have been great successes. The 1996 welfare reforms gave employment a central role in the ability to benefit from income transfers; and the growth of the EITC as a proportion of transfers has made its employment requirement all the more important to poor families. Very poor households, with incomes at or near zero, are distinct in many ways from the less severely poor with incomes above $15,000. The National Tax Rebate proposal has three major features. These include: Cash payments to individuals regardless of income; treating these payments as taxable income but not otherwise reducing benefits; and financing the program by eliminating other welfare programs and tax expenditures, and by treating the transfer as taxable income.