Tax Bracket Question

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Marvarnett

2008-03-06 2:51 PM

Champion

6962

Atlanta, Ga

Subject: Tax Bracket Question

What's the difference between Marginal Tax Bracket and Effective Tax Bracket?

Yes, I could look it up, but I'm sure to get better answers on COJ.

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the bear

2008-03-06 3:05 PM

in reply to: #1256950

Resident Curmudgeon

25290

The Road Back

Gold member

Subject: RE: Tax Bracket Question

OOH, an easy one.

Marginal tax rate is the rate (percentage) you pay on the next (or last) dollar earned.

Effective tax rate is the rate (percentage) you pay on your total income.

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condorman

2008-03-06 3:08 PM

in reply to: #1257015

Champion

4942

Richmond, VA

Subject: RE: Tax Bracket Question

the bear - 2008-03-06 4:05 PM

OOH, an easy one.

Marginal tax rate is the rate (percentage) you pay on the next (or last) dollar earned.

Effective tax rate is the rate (percentage) you pay on your total income.

see, I thought the Marginal tax rate included trans fat...

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the bear

2008-03-06 3:12 PM

in reply to: #1256950

Resident Curmudgeon

25290

The Road Back

Gold member

Subject: RE: Tax Bracket Question

Example:

Say the 2007 federal tax rates are as follows:

your taxable income is between...	your tax bracket is:
$0 and $7,825	10%
$7,825 and $31,850	15%
$31,850 and $77,100	25%
$77,100 and $160,850	28%
$160,850 and $349,700	33%
$349,700 and above	35%

if you earn $100,000, your marginal tax rate is 28%. You will get to keep only 72¢ of the next dollar earned.

But your tax bill is $22,110.75, making your effective tax rate 22.1%.

Edited by the bear 2008-03-06 3:15 PM

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Iron_Gus

2008-03-06 7:56 PM

in reply to: #1256950

Master

1915

Hamilton, Victoria

Subject: RE: Tax Bracket Question

I like your rates...

Now a Proctologist will tell you how Australia funds their economy.

Tax rates 2007-08

Taxable income	Tax on this income
$1 – $6,000	Nil
$6,001 – $30,000	15c for each $1 over $6,000
$30,001 – $75,000	$3,600 plus 30c for each $1 over $30,000
$75,001 – $150,000	$17,100 plus 40c for each $1 over $75,000
$150,001 and over	$47,100 plus 45c for each $1 over $150,000