Mrs. Bern's marginal tax rate is 35%, and her grandson Jeff's marginal tax rate is 12%. Which of the following statement is false?

Question

Quizplus · Accepted Answer

The statements provided are all true in the context of U.S. tax principles. A) is incorrect because shifting deductions from a lower tax rate (Jeff) to a higher tax rate (Mrs. Bern) would not save taxes; it's the income shifting that saves taxes. B) correctly states that shifting income from Mrs. Bern to Jeff saves 23 cents per dollar due to the difference in their marginal tax rates. C) is also true as the assignment of income doctrine prevents taxpayers from simply assigning their income to others to avoid taxes. Therefore, D) is correct because none of the statements are false.

Mrs Bern's Marginal Tax Rate Is 35%, and Her Grandson