Marginal Tax Rates
Discussions center on correcting misconceptions about progressive tax brackets, emphasizing that marginal rates apply only to income exceeding specific thresholds rather than the entire income.
Activity Over Time
Top Contributors
Keywords
Sample Comments
You forget to take into account the tax bracket!
All the fuss over OMG HIGHER TAXES for people making over $250K/year neglects one important detail: these tax brackets are marginal tax rates, not absolute ones. Even if the rates for people making $250K and up had reverted to Clinton-era levels, someone making $251K of taxable income would be charged almost exactly the same absolute tax rate, all other factors being equal, as someone making $249K.(ETA: If you look at the table, the hypothetical family’s combined Federal
Don't forget about income taxes, that'll skew that more toward the 50% mark .
You should reexamine your payslip. The highest tax bracket may be roughly 50%, but none of your income is actually in that bracket. You probably get to keep about 65% of your income, which is still less than you would get to keep in California.
Almost but not quite - at high ends of salary the marginal tax rate is 38%, so $50k->$100k doesn't necessarily make you richer, it just makes Uncle Sam happier.
You don't seem to understand how the progressive taxation works. In U.S. you pay 0 tax on first ~20k income, 15% on the next 35k, 22% on next 40k and so on (random numbers). The 22% is what you pay on anything above 55k in this example. But for the first 55k you pay only 20k * 0% + 35k * 15%=5250, e.g. 9.5%
Taxes are calculated on the bracket though. So not the whole amount.
Could you source the average tax rate number? That’s only the base tax rate for all income above ~20k.
you 're probably applying the highest tax bracket to the whole amount, but that's not how it works
It's only 45% on money above 60k, it's not the entire paycheck.