US federal income tax is progressive by law, but which best explains why wealthy individuals can often pay far less in taxes than the top tax rate?

The top tax rate applies to taxable income, not to every dollar of a person’s wealth or income. Wealthy individuals may use provisions in the tax code—such as deductions, credits, and preferential rates on some types of income—to lower the rate they actually pay. Choice C, “High-income earners use tax laws to their advantage to reduce their tax rates,” best captures this broad explanation; deductions alone, as in B, are only one method.

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