That's a policy proposal that's been around a long time: it's sometimes been called a negative income tax.

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In fact, they were the brainchild of iconic conservative economist Milton Friedman, who proposed a similar idea (called a negative income tax) 60 years ago.

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While Americans were arguing about Reaganomics in the 1980s, Swedish households were enjoying a negative tax rate on capital income, once generous deductions and adjustments for inflation were taken into account.

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Using the data from 1913 through the end of 2011, the correlation between the maximum marginal income tax bracket and total Federal receipts is a negative 0.50.

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At the same time, consumer debt levels skyrocketed and the savings rate actually turned negative (U.S. households consumed more than their after-tax income).

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Once your retirement income is above that floor, there is no good reason to force taxpayers to pay more for higher benefits, especially because Social Security pays such poor, below market returns on tax payments into the program, actually negative real returns for higher income workers.

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In addition, money losing businesses with negative incomes now reporting on individual tax returns were counted after 1986 among the bottom income earners as a result, which would further exaggerate supposed inequality.

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The effect on GDP would be negative, just as it would for proposed expansions of the income-capped refundable Earned Income Tax Credit, and the refundable part of the child credit.

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