)
So by taking x
= (x + A/r) the allowance in fact means adjustment of exemption, with the subtle difference that x
now just stands for the intersection with the horizontal axis, and not with exemption proper. Normally A would be chosen such that net income at subsistence y = B equals B, so that we might as well raise exemption to subsistence:
B = B - r(B - x) + A
A = r (B - x)