Scenario 20-8
Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability:
Taxes owed = (1/4 of income) - $14,000

-The ancient Greek philosopher, Plato, concluded that in an ideal society the income of the richest person
A)would be equal to the income of the poorest person.
B)would be no more than four times the income of the poorest person.
C)would be reflective of the effort put forth by that person.
D)would be taxed at a higher rate than the income of the poorest person.

Question

Scenario 20-8
Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability:
Taxes owed = (1/4 of income) - $14,000
​
​
-The ancient Greek philosopher, Plato, concluded that in an ideal society the income of the richest person
A)would be equal to the income of the poorest person.
B)would be no more than four times the income of the poorest person.
C)would be reflective of the effort put forth by that person.
D)would be taxed at a higher rate than the income of the poorest person.

Quizplus · Accepted Answer

Plato believed that in an ideal society, the income of the richest person should be no more than four times the income of the poorest person. This is in line with the negative income tax formula presented in the scenario, where taxes owed are calculated based on the income of the family. A negative income tax system can help address income inequality by redistributing wealth and providing support to those who are struggling financially.

Scenario 20-8 Suppose the Government Implemented a Negative Income Tax and Used