Understanding tax brackets: What few know and many exploit
Published on
Tuesday, 26 October 2010 at 19:07
I was talking to a friend recently about tax philosophy and was reminded of the fact that most people don't understand how tax brackets work. Many people know what tax bracket they're in (e.g. 28%), but they don't realize that doesn't mean that they pay a flat 28% before deductions. Taxes in the US are bracketed, so millionaires pay the same amount as the minimum wage earner at the burger joint down the street on the first few thousand dollars they earn.
Read on for a detailed explanation and what it means for tax policy.