Attempts: Average: /2 5. The negative income tax Many economists believe that a

Question

Attempts: Average: /2 5. The negative income tax Many economists believe that a more effective way to supplement the income of the poor is through a negative income tax. Under this scheme, everyone reports his or her income to the government; individuals and families earning a higher income will pay a tax based on that income, while low-income individuals and families receive a subsidy, or negative tax. Assume that the only qualification required to receive a tax credit is low income Suppose the government uses the following equation to compute a family's tax liability: Taxes owed = ( 1/2 of Income )-$10.000 For each of the incomes listed in the following table, determine the tax liability for a family with that income level. (Note: If a family receives a subsidy because its income is too low, be sure to indicate the tax liability as negative.) Income Tax Liability (Dollars) (Dollars) 10,000 20,000 30,000 True or False: If a family is currently receiving a tax credit, the credit is reduced by $0.33 for each additional dollar earned until the family reaches an income of $20,000 and the credit becomes $0. O True False Grade It Now Save & Continue Continue without saving

Explanation / Answer

income liability. liablity= 1/2 income-10000

0. -10000

10000. -5000

20000 0

30000. 5000

false

for every additional income credit decreases by $.5

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.