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Who Pays the Income Tax? Part 2

Summary:
For more, see Part 1 of this chart series. Marginal rates are what taxpayers in a given bracket pay on the portion of their overall income that falls within that bracket’s range, not on their entire income. Overall income and tax brackets are determined after the taxpayer takes deductions such as the mortgage interest deduction or the standard deduction. When a person’s income increases, so does the share of that income owed in income taxes, as shown below. With tax reform currently under discussion in Congress, what might these rates look like next year? Below are the current income tax brackets and rates compared to the ones proposed in the Senate and House of Representatives. Each system follows the same pattern of increasing tax rates as income increases, maintaining the progressivity

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For more, see Part 1 of this chart series.

Marginal rates are what taxpayers in a given bracket pay on the portion of their overall income that falls within that bracket’s range, not on their entire income. Overall income and tax brackets are determined after the taxpayer takes deductions such as the mortgage interest deduction or the standard deduction. When a person’s income increases, so does the share of that income owed in income taxes, as shown below.Who Pays the Income Tax? Part 2

Who Pays the Income Tax? Part 2With tax reform currently under discussion in Congress, what might these rates look like next year? Below are the current income tax brackets and rates compared to the ones proposed in the Senate and House of Representatives. Each system follows the same pattern of increasing tax rates as income increases, maintaining the progressivity of the current American income tax.Who Pays the Income Tax? Part 2

Veronique De Rugy
Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University and a nationally syndicated columnist. Her primary research interests include the U.S. economy, the federal budget, homeland security, taxation, tax competition, and financial privacy. Her popular weekly charts, published by the Mercatus Center, address economic issues ranging from lessons on creating sustainable economic growth to the implications of government tax and fiscal policies. She has testified numerous times in front of Congress on the effects of fiscal stimulus, debt and deficits, and regulation on the economy.

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