Question

Which of the following is not correct? a. A negative income tax only applies to working...

Which of the following is not correct?

a.

A negative income tax only applies to working people, so it encourages people to get full-time work.
b.

Supporters advocate the use of the Earned Income Tax Credit as a way to help the working poor.
c.

A negative income tax subsidizes the incomes of poor people.
d.

An advantage of a negative income tax is that it is not based on the number of children, so it does not provide incentives for unmarried women to have children.
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Answer #1

Answer - Option D

An advantage of negative income tax is that it is not based upon the number of children so it does not provide incentive for unmarried women to have children.

It encourages the people to work so that they can earn the negative income tax. Because the poor earn lesser income than threshold limit , for them negative income tax is a subsidy. Income tax credit provides the financial help to the lower working class group. Hence , option D will be the correct answer.

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