Scenario 20-3 Suppose the Government Implemented a Negative Income Tax and Used

question 31

Multiple Choice

Scenario 20-3
Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability:
Taxes owed = (1/3 of income) - $15,000
-Refer to Scenario 20-3.Below what level of income would families start to receive a subsidy from this negative income tax?

• A) $15,000
• B) $30,000
• C) $45,000
• D) $60,000

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Definitions:

Divide Income

The process of distributing a portion of a company's earnings to its shareholders as dividends.

Partnership Net Income

Partnership Net Income is the total earnings made by a partnership, to be divided among its partners according to their agreement.

Negligence Claims

Legal claims filed as a result of a failure to exercise a degree of care that, under the circumstances, the law requires for the protection of other persons or those interests of other persons that may be adversely affected by a lack of such care.