Negative income taxes generally mean high marginal net tax rates for low-income earners. In your example, there's a 20% marginal tax rate for people earning less than 60K.
I don't consider 20% to be a high marginal tax rate. I would love to be able to keep a full eighty percent of every additional dollar that I earn. Instead it's a lot closer to half. Indeed, the current tax code has the marginal rate set at 25% for single filers over $37,650 in income.
Yes, 20% may be a higher marginal tax rate than the poor are currently paying, but it's more than made up for by the huge payments they're getting. The marginal tax rate of a single filter earning $10K under the current tax codes is 15% (not that much less than 20%). But said person would also be getting $12,500 from the NIT. Doesn't seem bad to me at all.
And if you're really still worried about it, you could make the phase-out not linear over $60K by adding brackets, like the current tax code has. In other words, I don't think the effect that you are saying is really caused by the NIT per se, just in my sandbox implementation of it.
