Scenario 20-4
Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability:
Taxes owed = (1/5 of income) - $15,000
-Refer to Scenario 20-4. A family earning $100,000 before taxes would have how much after-tax income?
A)$50,000
B)$65,000
C)$80,000
D)$95,000

Question

Quizplus · Accepted Answer

The taxes owed for a family earning $100,000 before taxes would be:
Taxes owed = (1/5 × $100,000) - $15,000 = $5,000

Therefore, the after-tax income for this family would be:
$100,000 - $5,000 = $95,000

Scenario 20-4 Suppose the Government Implemented a Negative Income Tax and Used