This does not mean that if you bring in more than $372,951, every single dollar in your entire pile of money is taxed at 35%. Only Dollar #372,952 (plus whatever additional money you may earn) is taxed at that rate. Dollar #372,950 is taxed at 33%. Meanwhile, Dollar #1 is taxed at 10%. Hence the term "marginal": In a progressive tax system, there are margins (i.e., boundary lines) at which the government increases the tax rate on any additional incoming dollar.UPDATED 12:57 PM 8 Mar 2009
So I concluded a little infoviz might help clear up the misunderstanding.
[...]
Here's a graphic depiction:
And here's how that single person's tax prospects compare to those of married people filing jointly, married people filing separately and heads of household:
When the going gets weird, the weird turn pro. - Hunter S. Thompson
08 March 2009
Not afraid to be educational
Carrie explains marginal tax rates and information visualization in the same post:
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