An advantage of replacing all income-support programs with a negative income tax is that
A)It discourages low-income workers from working more
B)Households with income above the poverty threshold pay positive taxes
C)It is more difficult to administer than other antipoverty programs
D)Households lose benefits when they choose to work
E)All of the above

Question

Quizplus · Accepted Answer

With a negative income tax, households with income above the poverty threshold pay positive taxes, which encourages work and discourages dependence on government aid. This is an advantage over traditional income-support programs, which often create disincentives to work and create dependency. The other options listed are disadvantages of a negative income tax.

An Advantage of Replacing All Income-Support Programs with a Negative