Suppose the current welfare system is completely eliminated and replaced with a negative income tax.The tax credit granted to everyone is $10,000 and the tax on earnings is 25%.
-Refer to the above information.If an individual earned $25,000,his total income would be

Question

Quizplus · Accepted Answer

The individual's total income would be their earnings plus the tax credit minus the tax on their earnings. So, $25,000 + $10,000 - (0.25 * $25,000) = $28,750.

Suppose the Current Welfare System Is Completely Eliminated and Replaced