Under a negative income tax,if the tax rate is 50% and the guaranteed income level is $5,000,the breakeven income level will be

Question

Quizplus · Accepted Answer

The breakeven income level is where the amount of money received from the guaranteed income plus the amount received from the negative income tax equals the amount earned. 
At a tax rate of 50% and a guaranteed income level of $5,000, the breakeven income level can be calculated as follows:
$5,000 (guaranteed income) + $5,000 (half of the difference between the breakeven income level and the guaranteed income level) = $10,000
Therefore, the breakeven income level is $10,000.

Under a Negative Income Tax,if the Tax Rate Is 50