State whether you agree with the following statements and explain your reason¬ ing: . .

a A person in a very high tax bracket who makes a cash contribution to a college will reduce his or her tax liability by more than the amount of the gift, b A decision as to whether a person is willing to undertake additional work in order to obtain additional income should be influenced more by a person s marginal tax rate than by his or her average tax rate.

 LO3