Scenario 20-5
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) - $10,000
-Refer to Scenario 20-5. A family earning $110,000 before taxes would have how much after-tax income?
A)$82,500
B)$92,500
C)$100,000
D)$127,500

Question

Quizplus · Accepted Answer

Taxes owed = (1/4 x $110,000) - $10,000
= $27,500 - $10,000
= $17,500
After-tax income = $110,000 - $17,500
= $92,500

Scenario 20-5 Suppose the Government Implemented a Negative Income Tax and Used