Question

Compared to a negative income tax, the federal personal income tax is thought of as a...

Compared to a negative income tax, the federal personal income tax is thought of as a way to promote greater equality. Why?

Homework Answers

Answer #1

It can be mentioned that negative Income Tax occurs when if a person is earning below the prescribed level then they would receive a supplemental pay from the government and this is negative income tax and this is not a better way to promote equality because what happens with negative income taxes there would be too much spending for the Government and this can also make people lazy because they would anyhow receive a supplemental pay as a result of which the productivity will not go with which the overall taxes received by the government might reduce with which there would be severe impact in the economy which is something not desired. Result of which reduction of income inequality programs might be at halt as well that is the reason why the federal personal income tax is a way to promote great equality especially in the long run

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