At December 31, 2012, Higley Corporation has one temporary difference which will reverse and cause taxable amounts in 2013. In 2012, a new tax act set taxes equal to 45% for 2012, 40% for 2013, and 34% for 2014 and years thereafter.

Instructions
Explain what circumstances would call for Higley to compute its deferred tax liability at the end of 2012 by multiplying the cumulative temporary difference by:

(a) 45%.
(b) 40%.
(c) 34%.