marginal tax rate
Next-dollar tax percentage
The marginal tax rate is the percentage of tax applied to the next dollar of income earned.
Because income tax systems are typically progressive, different portions of income are taxed at different rates.
If you earn $50,000 and the marginal rate at that level is 22%, an additional dollar of income would be taxed at 22 cents—not your entire income.
Often confused with effective tax rate, which is the average rate paid across all income.
- taxable incomeEarnings subject to taxation
- tax bracketsIncome-based percentage groupings
- tax codeLaws governing taxation
- tierHorizontal structural layer
- graduatedCompleted formal studies
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- taxationtax, income tax, sales tax, tax return, tax refund