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. The government does not receive any tax revenue through this negative income tax if the family with the highest income earns $56,000.

Question

Quizplus · Accepted Answer

If the family with the highest income earns $56,000, the taxes owed would be calculated as (1/4 of $56,000) - $14,000 = $14,000 - $14,000 = $0. Therefore, the government does not receive any tax revenue from this family.

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