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A proposal for a negative income tax is designed to provide an income guarantee for each person, irrespective of his or her age or status, of $3000 per year. Thus a family of four would have an income guarantee of $12,000 per year. The transfers under the program will be phased out at a rate of 25% as earned income increases. Calculate the break-even level of income for a family of four.

A proposal for a negative income tax is designed to provide an income guarantee for each person, irrespective of his or her age or status, of $3000 per year. Thus a family of four would have an income guarantee of $12,000 per year. The transfers under the program will be phased out at a rate of 25% as earned income increases. Calculate the break-even level of income for a family of four.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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5. A proposal for a negative income tax is designed to provide an income guarantee for each person, irrespective of his or her age or status, of $3000 per year. Thus a family of four would have an income guarantee of $12,000 per year. The transfers under the program will be phased out at a rate of 25% as earned income increases. Calculate the break-even level of income for a family of four.
Transcribed Image Text:5. A proposal for a negative income tax is designed to provide an income guarantee for each person, irrespective of his or her age or status, of $3000 per year. Thus a family of four would have an income guarantee of $12,000 per year. The transfers under the program will be phased out at a rate of 25% as earned income increases. Calculate the break-even level of income for a family of four.
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