Tazes Owed = (1/4 of Income) - $10,000 4 For each of the incomes listed in the following table, determine the tax liability for a family with that income level. (Note: If a family receives a subsidy because its income is too low, be sure to indicate the tax liability as negative.) Income Tax Liability (Dollars per year) (Dollars per year) 0 20,000 40,000 60,000 True or False: If a family is currently receiving a tax credit, the credit is reduced by $0.50 for each additional dollar earned until the family reaches an income of $40,000 and the credit becomes $0. O True O False
Tazes Owed = (1/4 of Income) - $10,000 4 For each of the incomes listed in the following table, determine the tax liability for a family with that income level. (Note: If a family receives a subsidy because its income is too low, be sure to indicate the tax liability as negative.) Income Tax Liability (Dollars per year) (Dollars per year) 0 20,000 40,000 60,000 True or False: If a family is currently receiving a tax credit, the credit is reduced by $0.50 for each additional dollar earned until the family reaches an income of $40,000 and the credit becomes $0. O True O False
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![SC
Many economists believe that a more effective way to supplement the income of the poor is through a negative income tax. Under this scheme,
everyone reports his or her income to the government; individuals and families earning a higher income will pay a tax based on that income, while
low-income individuals and families receive a subsidy, or negative tax. Assume that the only qualification required to receive a tax credit is low
income.
Suppose the government uses the following equation to compute a family's tax liability:
Taxes Owed = (1/4 of Income)
For each of the incomes listed in the following table, determine the tax liability for a family with that income level. (Note: If a family receives a
subsidy because its income is too low, be sure to indicate the tax liability as negative.)
Income
Tax Liability
(Dollars per year) (Dollars per year)
0
20,000
40,000
60,000
77°F
Mostly sunny
(1/4 of Income) - $10,000
F1
F2
0-
F3
Q+
F4
F5
DA
COL
F6
i
F7
1
C
J
F8
C
F9
SAC
F10
FO
F11
F12
2
Fn
Lock
Pr](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F68004d66-ea8f-4be8-8701-8ec761cf41f5%2F781904c3-9c21-4715-b866-39c3f972fb51%2Fg1ojv_processed.jpeg&w=3840&q=75)
Transcribed Image Text:SC
Many economists believe that a more effective way to supplement the income of the poor is through a negative income tax. Under this scheme,
everyone reports his or her income to the government; individuals and families earning a higher income will pay a tax based on that income, while
low-income individuals and families receive a subsidy, or negative tax. Assume that the only qualification required to receive a tax credit is low
income.
Suppose the government uses the following equation to compute a family's tax liability:
Taxes Owed = (1/4 of Income)
For each of the incomes listed in the following table, determine the tax liability for a family with that income level. (Note: If a family receives a
subsidy because its income is too low, be sure to indicate the tax liability as negative.)
Income
Tax Liability
(Dollars per year) (Dollars per year)
0
20,000
40,000
60,000
77°F
Mostly sunny
(1/4 of Income) - $10,000
F1
F2
0-
F3
Q+
F4
F5
DA
COL
F6
i
F7
1
C
J
F8
C
F9
SAC
F10
FO
F11
F12
2
Fn
Lock
Pr
![Taxes Owed = (1/4 of Income) - $10,000
For each of the incomes listed in the following table, determine the tax liability for a family with that income level. (Note: If a family receives a
subsidy because its income is too low, be sure to indicate the tax liability as negative.)
Income
(Dollars per year)
0
20,000
40,000
60,000
F
stly sunny
True or False: If a family is currently receiving a tax credit, the credit is reduced by $0.50 for each additional dollar earned until the family reaches an
income of $40,000 and the credit becomes $0.
O True
Tax Liability
(Dollars per year)
O False
O](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F68004d66-ea8f-4be8-8701-8ec761cf41f5%2F781904c3-9c21-4715-b866-39c3f972fb51%2F8d1g21n_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Taxes Owed = (1/4 of Income) - $10,000
For each of the incomes listed in the following table, determine the tax liability for a family with that income level. (Note: If a family receives a
subsidy because its income is too low, be sure to indicate the tax liability as negative.)
Income
(Dollars per year)
0
20,000
40,000
60,000
F
stly sunny
True or False: If a family is currently receiving a tax credit, the credit is reduced by $0.50 for each additional dollar earned until the family reaches an
income of $40,000 and the credit becomes $0.
O True
Tax Liability
(Dollars per year)
O False
O
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