Which of the following statements about the entity variable is false?

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Which of the following statements about the entity variable is false?

If Congress replaced the current progressive income tax rates with a proportionate rate applying

to all taxpayers, the entity variable would no longer be a factor in tax planning.

The entity variable becomes more important when Congress increases the progressivity of the

income tax.

Tax planning strategies based on the entity variable must involve at least two different taxpayers.

Tax planning strategies based on the entity variable must involve some type of income taxed at a

preferential rate.

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