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

Which statement is correct?

A) Tax credits reduce tax liability on a dollar-for-dollarbasis.
B) Tax deductions reduce tax liability on a dollar-for-dollarbasis.

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

D) Tax deductions are more valuable for low-income taxpayersthan for high-income taxpayers.

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