Figure 8 clarifies that the minimum wage means that there are no full time wage earners below M, so that tax and net income are only relevant above it.

Figure 8: Tax plot revisited

Figure 9 gives gives the same result but then as a net income plot. The horizontal axis gives income, the vertical axis net income. The tax is given by the difference between net income and the 45-degrees line. Subsistence now is a horizontal line at B. The intersection of the B-line and the net income line gives the minimum wage M. You must earn at least M to satisfy the minimum net income requirement B.

Figure 9: Net income plot

The Tax Void

Let us now combine the earnings distribution and the tax plot.

Note that the tax figures have shaded areas only above the minimum wage. The tax appears effective at and above the minimum wage, but not below it. Though taxes are defined below the minimum wage, there are no taxes collected, since people are unemployed below the minimum wage. The clear area from net minimum till the gross minimum wage M can be called the Tax Void.