Susan and Tom had the same aggregate taxable income over the last ﬁve years. Susan's income was relatively smooth over this period but Tom's income ﬂuctuated greatly over this same time period. Assuming that tax rates have remained reasonably constant over this time period who would experience the greater total tax liability?

Question

Quizplus · Accepted Answer

Tom would experience the greater total tax liability because his fluctuating income may have pushed him into higher tax brackets, resulting in higher taxes owed. Susan's relatively smooth income may have kept her in the same tax bracket, resulting in a consistent tax liability.

Susan and Tom Had the Same Aggregate Taxable Income Over