in-a-negative-income-tax-system-how-does-the-tax-liability-of-a-family-earning-3

Question

In a negative income tax system, how does the tax liability of a family earning $30,000 compare to a family earning $70,000?

Accepted Answer

The $30,000 family receives a subsidy, while the $70,000 family pays taxes.

Answer

The $70,000 family receives a larger subsidy than the $30,000 family.

Answer

Both families receive the same subsidy.

Answer

Both families pay taxes.

In a negative income tax system, how does the tax liability of a family earning \$30,000 compare to a family earning \$70,000?