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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. find out 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

Microeconomics, Economics

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