Final answer:
Taxpayers most likely to benefit from income-shifting strategies are those in different tax brackets. By shifting income to individuals in lower tax brackets, the overall tax burden can be reduced due to the progressive nature of the tax system.
Step-by-step explanation:
Income-Shifting Strategy
The taxpayers most likely to benefit from an income-shifting strategy are those in different tax brackets. Because the United States has a progressive tax system, as individuals' or households' income increases, so does the marginal tax rate they fall under. For taxpayers in higher tax brackets, shifting income to those in lower tax brackets can reduce the overall tax burden. This is because the additional income will be taxed at a lower rate for those in the lower bracket, leading to tax savings.
For example, if a taxpayer is in the 32% tax bracket and they are able to shift income to someone in the 12% tax bracket, the income shifted will be taxed at a significantly lower rate. This strategy does not benefit taxpayers in the same tax bracket, as there would be no change in the marginal tax rate on the shifted income. Similarly, it does not benefit those with no taxable income, as they would not have tax liability to shift.
It is important to note that tax policies and brackets can change over time, and income-shifting should be completed in accordance with tax laws and regulations.