Question

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?

Answer 1

The correct answer to your question is:

"High-income earners use tax laws to their advantage to reduce their tax rates."

Answer 2

The answer is: High-income earners use tax laws to their advantage to reduce their tax rates.

For example, according to tax laws, businesses are not subjected to tax payment if they do not experience a profit. Many business owners leverage this law by recording expense that are not actually exist, which make their businesses look like as if it experience a loss while it actually obtained profits from the operation.