Explore BrainMass
Share

# proposal for a negative income tax

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

A proposal for a negative income tax is designed to provide an income guarantee for each person, irrespective of his/her age or status, of \$3,000 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. If all families above the break-even level of income pay a flat rate 25% tax on their earnings, plot disposable income as a function of earned income. Discuss the costs of this plan. Create a graph on a spreadsheet program (such as MS Excel), copy and paste it into a MS Word document, write your answer in the MS Word document, and upload it to Blackboard.

https://brainmass.com/economics/personal-finance-savings/proposal-for-a-negative-income-tax-494999

#### Solution Preview

The response addresses the queries posted in 357 words with references.

//In this paragraph we are going to elaborate the impact of negative income tax to provide guarantee for each person a certain amount of earning. There will be discussion over the break even earning on which, no tax will be levied.//

In the given case, there are four members in a family. The negative income tax will provide the guaranteed sum of \$3000 per member that means the total sum of \$12000 (3000*4) for the family will be guaranteed, as an earning. The tax rate of 25% will be imposed whenever ...

#### Solution Summary

The response addresses the queries posted in 357 words with references.

\$2.19