"The idea of negative income tax is novel: In effect, it's a kind of income tax that works in reverse. For those who earn below a certain amount — like the poverty line — the government pays them. The largest example of NIT is the Earned Income Tax Credit (EITC), which serves 27 million working families in the US. It was started in 1975, under President Gerald Ford, expanded once by President Reagan, and expanded further by President Clinton. The EITC functions like a big tax refund. If a family makes below a certain amount each year, the government will refund the tax that was withheld plus an additional amount."