Exhibit 12-7 Negative income tax
-Under the negative income tax scheme in Exhibit 12-7, families earning between $10,000 and $40,000 would:

Question

Exhibit 12-7 Negative income tax 
-Under the negative income tax scheme in Exhibit 12-7, families earning between $10,000 and $40,000 would:

Quizplus · Accepted Answer

Families earning between $10,000 and $40,000 would receive payments under the negative income tax. The amount of payment would decrease as income increases until it reaches zero at $40,000. Therefore, option A is incorrect. Option C is also incorrect as families earning between $10,000 and $40,000 would receive payments under the negative income tax. Hence, option B is the correct choice.

Exhibit 12-7 Negative Income Tax