Scenario 20-1 ​

Multiple Choice

Scenario 20-1
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The government is proposing switching from a progressive tax system in which families pay 15% of the first $50,000 earned, 25% of the next $50,000 earned, and 35% of any income over $100,000 to a tax system in which every family pays 20% of their income minus $20,000.
-Refer to Scenario 20-1. What would libertarians think of the tax two policies?

A) They would favor the current progressive policy over the proposed policy because it accounts for diminishing marginal utility.
B) They would favor the proposed tax policy over the current progressive policy because it would result in a negative tax for the poorest families.
C) They would favor the current progressive tax policy over the proposed policy because it rewards those who work the hardest.
D) They would oppose both tax policies because both redistribute income.