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Many economists believe that a more effective way to supplement the income of low-income familles...

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Accounting

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Many economists believe that a more effective way to supplement the income of low-income familles 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 recelve a subsidy, or negative tax. Assume that the only qualification required to recelve a tax credit is low income. Suppose the government uses the following equation to compute a family's tax liability: TatesOwed=(1/2ofIncome)$6.000 For each of the incomes listed in the following table, determine the tax llabilly 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 lability as negative.) True of False: The maximum subsidy a family can receive is $3,000. True False

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