If the government decided that each family needs a minimum income of $25,000 and promised to make up the difference between whatever a family earned and $25,000, which of the following is correct?

Question

Quizplus · Accepted Answer

A) The government is effectively taxing every dollar earned up to $25,000 at a rate of 100% because any earnings up to $25,000 would be taken away by the government to provide the minimum income.
B) This program would reduce the incentive to work to earn any wage up to $25,000 because there would be no additional benefit to earning more than $25,000 as the government would still be providing the same amount.
C) If workers are discouraged from working due to this program, they will miss any on-the-job training that would have otherwise occurred, limiting their ability to improve their skills because they would not be gaining any work experience.

If the Government Decided That Each Family Needs a Minimum