Principle #4,taxes affect personal finance decisions,tells us that several points hold true regardless of what we invest in.Jason found a point that was included on the list in error.Which of the following is it?
A)The marginal tax rate is the rate you pay on the next dollar of earnings.
B)Tax-free investments should be compared on a before-tax basis.
C)You should consider tax-deferred investments.
D)Capital gains are better than ordinary income when it comes to taxes.
E)The higher your marginal tax bracket,the more attractive tax-free investments become.

Question

Quizplus · Accepted Answer

Tax-free investments should be compared on an after-tax basis, not a before-tax basis, to accurately assess their benefit relative to taxable investments. This is because the main advantage of tax-free investments is that the returns are not subject to income tax, which is only relevant when considering the after-tax return.

Principle #4,taxes Affect Personal Finance Decisions,tells Us That Several Points