The negative income tax Many economists believe that a more effective way to supplement the income of the poor is throug

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The negative income tax
Many economists believe that a more effective way to supplementthe income of the poor is through a negative income tax. Under thisscheme, everyone reports his or her income to the government;individuals and families earning a higher income will pay a taxbased on that income, while low-income individuals and familiesreceive a subsidy, or negative tax. Assume that the onlyqualification required to receive a tax credit is low income.
Suppose the government uses the following equation to compute afamily’s tax liability:
For each of the incomes listed in the following table, determinethe tax liability for a family with that income level. (Note: If afamily receives a subsidy because its income is too low, be sure toindicate the tax liability as negative.)
Income
Tax Liability
(Dollars)
(Dollars)
True or False: Any family with an annual income more than$33,000 will receive a subsidy.
True
False