Question: Which statement is correct ? A) Tax credits reduce tax liability on a dollar-for-dollar basis. B) Tax deductions reduce tax liability on a dollar-for-dollar basis.

Which statement is correct?

A) Tax credits reduce tax liability on a dollar-for-dollar basis.

B) Tax deductions reduce tax liability on a dollar-for-dollar basis.

C) The benefit of a tax credit depends on the taxpayer's marginal tax rate.

D) Tax deductions are less valuable for high-income taxpayers than for low-income taxpayers.

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