This table shows a payment schedule for a hypothetical negative income tax program.

-From the table,it can be seen that

Question

This table shows a payment schedule for a hypothetical negative income tax program.
 
-From the table,it can be seen that

Quizplus · Accepted Answer

From the table, we can see that families earning $3,000 receive a tax credit of $500, which increases their after-tax income to $3,500. Therefore, option C is correct. Option A is incorrect because the table shows that families with an income of $2,000 receive a tax credit of $1,000, not that they must pay taxes of $1,000. Option B is incorrect because the table does not provide any information about the poverty level of income. Option D is incorrect because the tax credit decreases as income increases above $4,000, indicating a progressive tax scheme rather than a constant tax rate. Option E is incorrect because a regressive tax would take a larger percentage of income from lower-income families, which is not the case with the negative income tax program shown in the table.

This Table Shows a Payment Schedule for a Hypothetical Negative