I think most people don’t understand how marginal tax brackets work, but basic math can help: (example using 22% tax bracket and 37%)
REMEMBER you are taxed on a margin. So you pay a fixed amount and then a percentage on a margin above the lower number on your tax bracket. Hence marginal taxation 🙂
22% $38,701 to $82,500 $4,453.50 plus 22% of the amount over $38,700
So at 50k income one will pay $4,453.50 + ($50,000 – $38,700)*.22 = $4,453.50 + $2,486 = $6,939.5
$6,939.5/$50,000= .138 or roughly ~14%
So someone making 50k per year is only paying roughly 14 percent OVERALL.
sparing the analytics, using the highest tax bracket (37%) with 1,000,000 income
$150,689.50 + $500,000*.37 = $335,689.5
Someone making 50k per year is only paying 14% per year in taxes whereas someone making 1 million is paying 33% taxes. So technically, when you use what people pay overall vs the marginal tax rate (and then forget the margins) data can be twisted to make it look like those in the higher tax brackets are paying less of a percentage than “most redditors”. I can assure you though, with simple maths, it can be shown that this isn’t true.
(I did this all using single filing from 2018. I’m just a normal person who crunched some #s, DON’T MURDER ME)
Source: quicken loan tax brackets
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