Which One of These Statements Concerning the Tax Reform Act

question 3

Multiple Choice

Which one of these statements concerning the Tax Reform Act of 1986 is false?

• A)The Act evened out tax rates on alternative types of investment.
• B)The Act increased effective tax rates on equipment.
• C)It raised the personal exemption substantially.
• D)The Act had a specified time period of effectiveness.

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Definitions:

Patents

Legal documents granting exclusive rights to inventors for their innovations, preventing others from making, using, or selling the invention for a certain period of time.

Accounts Receivable

Money that is owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Marginal Tax Rate

The rate at which the last dollar of a taxpayer's income is taxed, indicating the percentage of tax applied to their highest dollar of income.

Average Tax Rate

The proportion of total income that a taxpayer pays in taxes, calculated by dividing the total taxes paid by the total taxable income.