Under a negative income tax program, the higher the income earned in the marketplace, the higher will be the family's after-tax income.

Question

Quizplus · Accepted Answer

A negative income tax program is designed to provide financial assistance to low-income households. As a household earns more income in the marketplace, the negative income tax benefit will decrease, and eventually phase out completely. This means that the family's after-tax income will increase as their marketplace income increases.

Under a Negative Income Tax Program, the Higher the Income