Asked by courtney mitchell on May 03, 2024
Verified
Higher marginal income tax rates create an incentive for companies to underfund their pension plans.
Marginal Income Tax Rates
The percentage of tax applied to your income for each tax bracket in which you qualify.
Pension Plans
Retirement plans sponsored by employers providing income to employees upon retirement.
- Understand the motivations and obligations related to the financing and reporting of pension schemes.
Verified Answer
MS
Matthew SaggersMay 09, 2024
Final Answer :
False
Explanation :
Higher marginal income tax rates incentivize companies to fully fund their pension plans because contributions to pension plans are tax-deductible, reducing taxable income and thus the amount of taxes owed.
Learning Objectives
- Understand the motivations and obligations related to the financing and reporting of pension schemes.
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