Assume that the government proposes a negative income tax that calculates the taxes owed as follows: taxes owed equal 30% of income less $12,000. A family that earns an income of $40,000 will

A. neither pays taxes nor receives an income subsidy.

B. receive an income subsidy of $3,600.

C. pay $3,600 in taxes.

D. pay $12,000 in taxes.