Mingming and Xavier,unrelated Single Taxpayers,have Each Incurred a $1,000 Expenditure

question 47

Multiple Choice

Mingming and Xavier,unrelated single taxpayers,have each incurred a $1,000 expenditure.Before considering this expenditure,Mingming has taxable income of $500,000 and Xavier has taxable income of $32,000.Assume the expenditure qualifies as either a tax deduction or a 25% credit.Which of the following statements is correct?

• A)Mingming will prefer the credit,but Xavier will prefer the deduction.
• B)Mingming will prefer the deduction,but Xavier will prefer the credit.
• C)Both taxpayers will prefer the credit.
• D)Both taxpayers will prefer the deduction.

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Definitions:

Recycle

The process of converting waste materials into new materials and objects, aiming to reduce resource consumption, environmental pollution, and energy usage.

Private Property Rights

Legal entitlements that grant individuals or entities exclusive use, control, and disposal of properties and assets.

Wealth Creating

The process of generating financial gain through investment, business ventures, or other methods that increase an individual's or entity's assets.

Capitalism

An economic system characterized by private ownership of the means of production and the creation of goods or services for profit.