Scenario 20-1 Suppose That a Society Is Made Up of Five Families

question 300

Multiple Choice

Scenario 20-1
Suppose that a society is made up of five families whose incomes are as follows:
$120,000; $90,000; $30,000; $30,000; and $18,000.
The federal government is considering two potential income tax plans:
Plan A is a negative income tax plan where the taxes owed equal 1/3 of income minus $20,000.
Plan B is a two-tiered plan where families earning less than $35,000 pay no income tax and families earning more than $35,000 pay 10% of their income in taxes. The income tax revenue collected from those families earning over $35,000 is then redistributed equally to those families earning less than $35,000.
-Refer to Scenario 20-1.Assuming that utility is directly proportional to the cash value of after-tax income,which government policy would an advocate of liberalism prefer?

• A) Plan A
• B) Plan B
• C) either Plan A or Plan B
• D) neither Plan A nor Plan B because any plan that forcibly redistributes income is against the philosophy

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Definitions:

Proprioceptors

Sensory receptors located in the muscles and tendons, providing information about body position and movement to the brain.

Joint Movement

The action or process of moving or being moved at the points where two bones meet, allowing for flexibility and support.

Neurotransmitters

Chemical substances in the nervous system that transmit messages between neurons or from neurons to muscles.

Endorphins

Natural, pain-relieving chemicals produced by the body during stress, exercise, or pain, promoting feelings of well-being and reduce discomfort.