Question

Which of the following does NOT accurately describe the calculation of federal tax payable for​ individuals?...

Which of the following does NOT accurately describe the calculation of federal tax payable for​ individuals?

A.

There are currently five federal tax​ brackets, with rates ranging from​ 15% to​ 33%.

B.

Progressive tax rates are applied to brackets​ (or marginal​ increments) of taxable income.

C.

The federal tax rates are​ marginal, meaning that once taxable income reaches the next tax​ bracket, all of the​ individual's taxable income is taxed at the higher rate.

D.

The federal tax brackets are indexed to the Consumer Price Index to account for inflation.

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Answer #1
The federal tax rates are​ marginal, meaning that once taxable income reaches the next tax​ bracket, all of the​ individual's taxable income is taxed at the higher rate is not accurate.
Once taxable income reaches the next tax​ bracket, only the portion of taxable income within the next bracket is taxed at the higher rate.
The current rate for individuals range from​ 15% to​ 33%. Progressive tax rates are applied to the taxable income within the tax bracket.
Option C is correct
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