The poverty reports,negative income taxation,and the constitution: an analysis and a compromise proposal†

Abstract. After some background discussion of the causes of and solutions to the problem of poverty, and an evaluation of the two recently published reports on this subject, the paper focuses on some political and economic constraints that are likely to be critical to the success of any proposal for a guaranteed annual income. Among these are the constitutional issue of who should control any GAI scheme, the relationship between a GAI and the present tax system, and the appropriateness of uniform guarantee levels across the nation. A compromise GAI scheme is then proposed which attempts to satisfy the relevant constraints, both economic and constitutional. Sommaire. Après une discussion préliminaire des causes de la pauvreté et de ses solutions possibles, ainsi qu'une évaluation des deux récents rapports sur le sujet, l'auteur étudie certaines contraintes politiques et économiques susceptibles de devenir des éléments critiques pour le succès de toute proposition de revenu annuel garanti. Entre autres, sont discutés, le probème constitutionnel du siège de l'autorité sur un plan de revenu annuel garanti, de la relation entre un tel plan et le présent système de taxation et de la désirabilité de niveaux unifonnes garantis à 1'échelle nationale. Enfin, un compromis est offert sous la forme d'un plan qui s'efforce de satisfaire les contraintes pertinentes de nature économique et constitutionnelle.     

A Bargaining Model of Holdouts and Takings

The holdout problem is commonly cited as the justification foreminent domain, but the nature of the problem is not well understood.This article models the holdout problem in a bargaining framework,where a developer seeks to acquire several parcels of land fora large-scale development. We show that in the absence of eminentdomain, holdouts are a significant threat, resulting in costlydelay. However, if the developer has the power to use eminentdomain to acquire the land from holdouts, all sellers will bargain,thus avoiding delay. An offsetting cost is that owners may negotiateprices below their true value, possibly resulting in excessivetransfer of land to the developer.