The country of Econoville has created a negative income tax for its residents.Tax liability in the country is determined by the following equation:
Taxes owed = (20% of income) -$7,500
If Youssef's income is $10,000,what is his total tax owed (a positive number)or tax credit (a negative number)?

Question

Quizplus · Accepted Answer

Using the equation given, we have: 
Taxes owed = 0.20($10,000) - $7,500 = $2,000 
Since Youssef's income is lower than the threshold of $10,000, he will receive a tax credit of $2,000. Therefore, the answer is (A) F1F1F1S1F1F1F10$5,500.

The Country of Econoville Has Created a Negative Income Tax