A negative income tax works by

Question

Quizplus · Accepted Answer

A negative income tax involves giving people below a certain income level a lump sum, often based on a percentage of their income deficit, and then taxing further income. This is intended to provide a basic income floor for those who fall below a certain income threshold, while still incentivizing work and productivity by gradually reducing the amount of support provided as income increases. Option A and D are not accurate descriptions of a negative income tax, while Option C suggests universal basic income, which is a separate policy concept.

A Negative Income Tax Works by