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Assume That the Government Proposes a Negative Income Tax That

Question 316

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Assume that the government proposes a negative income tax that calculates the taxes owed as follows: Taxes Owed = (1/3 Assume that the government proposes a negative income tax that calculates the taxes owed as follows: Taxes Owed = (1/3 Income) - 10,000. If a family doesn't earn any income, how does the negative income tax affect it? A) It will receive an income subsidy of $1,000. B) It will receive an income subsidy of $3,000. C) It will receive an income subsidy of $10,000. D) It will not be affected at all, since the negative income tax requires a family to earn income. Income) - 10,000. If a family doesn't earn any income, how does the negative income tax affect it?


A) It will receive an income subsidy of $1,000.
B) It will receive an income subsidy of $3,000.
C) It will receive an income subsidy of $10,000.
D) It will not be affected at all, since the negative income tax requires a family to earn income.

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