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Consider a country that taxes its citizens individually according to the following rate schedule: Taxable Income Marginal Tax Rate First $30,000 15% Over $30,000 up

Consider a country that taxes its citizens individually according to the following rate schedule:

Taxable Income Marginal Tax Rate
First $30,000 15%
Over $30,000 up to $60,000 20%
Over $60,000 25%

Suppose that the steps to compute tax liability are the same in this tax system as they are in Canada. For a taxpayer with $20,000 in total income, compare the value to the taxpayer of having $3,000 of this income qualify for a deduction versus having $3,000 of this income qualify for a credit.

The value of the deduction would be ______ the value of the credit for this taxpayer.

multiple choice

  • greater than

  • less than

  • equal to

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