If a firm faces progressive tax rates,
A)they should spread income out across time and subsidiaries.
B)they should focus on maximizing income in one division or subsidiary.
C)they should manage their income recognition without regard to their taxes.
D)none of the options

Question

Quizplus · Accepted Answer

The firm should spread income out across time and subsidiaries to avoid reaching higher tax brackets and paying higher tax rates. This strategy will help in reducing the overall tax liability.

If a Firm Faces Progressive Tax Rates