Suppose the government proposes a negative income tax that calculates taxes owed according to the formula TAXES OWED = (1/3 * INCOME) - 10 000. A family that earns an income of $60 000 will:
A) neither pay taxes nor receive an income subsidy
B) pay $10 000 in taxes
C) receive a subsidy of $3000
D) receive an income subsidy of $10 000
Correct Answer:
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