Scenario 20-8
Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability:
Taxes owed = (1/4 of income) - $14,000

-Refer to Scenario 20-8. The government does not receive any tax revenue through this negative income tax if the family with the highest income earns $56,000.

Question

Scenario 20-8
Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability:
Taxes owed = (1/4 of income) - $14,000
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-Refer to Scenario 20-8. The government does not receive any tax revenue through this negative income tax if the family with the highest income earns $56,000.

Quizplus · Accepted Answer

If the highest income family earns $56,000, then their taxes owed would be (1/4)*$56,000 - $14,000 = $2,000. Therefore, the government would receive some tax revenue from this family.

Scenario 20-8 Suppose the Government Implemented a Negative Income Tax and Used