Which of the Following Characterizes the Negative Income Tax Concept

question 55

Multiple Choice

Which of the following characterizes the negative income tax concept?

• A) It is a flat tax that lower-income households do not pay.
• B) It is a progressive tax structure with enough deductions to provide refunds to some.
• C) It is a regressive tax with low-income earners getting a refund back when taxes are filed.
• D) It is a guaranteed annual income with earned incomes taxed at a flat rate.
• E) It is an income tax that eliminates all the inefficiency that occurs with the current tax system.

---

Definitions:

Convertible Debt

A short-term loan that can be turned into equity when future financing is issued.

Convertible Bond

A type of bond issued by a corporation that can be converted into a predetermined number of the company's equity shares at certain times during the bond's life, usually at the discretion of the bondholder.

Revolving Debt

A form of credit that allows the borrower to draw down, repay, and redraw loans repeatedly up to a certain credit limit.

Seed-stage Financing

Early financial investment aimed at supporting the launch and early growth of a startup, often in exchange for equity.