Scenario 20-4
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 20-4. A family earning $40,000 before taxes will owe tax.

Question

Quizplus · Accepted Answer

Using the formula, Taxes owed = (1/4 of $40,000) - $14,000 = $10,000 - $14,000 = -$4,000, which means the family would not owe taxes but would instead receive $4,000.

Scenario 20-4 Suppose the Government Implemented a Negative Income Tax and Used