Assume that the government proposes a negative income tax that calculates taxes owed by the following formula: Taxes owed = (1/3 × income) - $10,000.If a family doesn't earn any income,how does the negative income tax affect them

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Since the tax owed is calculated as (1/3 × income) - $10,000, a family with zero income would have a tax owed of (-$10,000). This means they would receive a subsidy of $10,000, which is the amount that brings their income up to the poverty level.

Assume That the Government Proposes a Negative Income Tax That