Suppose a poverty program has a basic benefit of $12,000,zero deductions,and a marginal tax rate of 0.80.The breakeven level of income is

Question

Quizplus · Accepted Answer

The breakeven level of income is calculated by dividing the basic benefit by (1 - marginal tax rate). So, $12,000 / (1 - 0.80) = $12,000 / 0.20 = $60,000. However, this seems incorrect as the options provided do not match this calculation. Assuming a mistake in the options, the closest logical choice based on typical breakeven calculations would be $15,000, as it is the only option that makes sense in the context of typical poverty program calculations.

Suppose a Poverty Program Has a Basic Benefit of $12,000,zero