the.com/tax bracket
The myth that scares people from raises, as if one dollar can tax your whole income retroactively.
means A tax bracket is one of the income ranges a government taxes at a specific rate, under a marginal system where only the income within that range gets taxed at it — not your entire earnings.
from The word 'bracket' comes from architecture and printing — a supporting fixture, then a printed symbol ( [ ] ) used to group or set off items. By the 1800s, 'bracket' had extended to mean a grouped category or range, like an age bracket or price bracket. 'Tax bracket' followed naturally once modern graduated income taxes arrived in the early 20th century, needing a word for the sliced income ranges that each rate applies to. The confusion about brackets retroactively taxing your whole income isn't etymological — it's just a popular misunderstanding of how marginal rates actually work.
- how it works
- only income inside that bracket is taxed higher
- common myth
- a raise can never shrink your take-home pay
- us system
- seven federal brackets, each a marginal slice
- origin
- us brackets date back to the 1913 income tax