Assume that the government proposes a negative income tax that calculates the taxes owed as follows: taxes owed equal 30% of income less $12,000. A family that earns an income of $40,000 will
A) neither pay taxes nor receive an income subsidy.
B) receive an income subsidy of $3,600.
C) pay $3,600 in taxes.
D) pay $12,000 in taxes.
Correct Answer:
Verified
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