Scenario 20-2
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) - $20,000
-Refer to Scenario 20-2.This negative income tax would guarantee what minimum level of income to every family?

Question

Quizplus · Accepted Answer

The negative income tax guarantees a minimum income of $20,000 to every family as this is the point at which their tax liability would be zero. Any income below $20,000 would result in the government providing financial assistance to raise their income up to the guaranteed minimum.

Scenario 20-2 Suppose the Government Implemented a Negative Income Tax and Used