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We Still Don't Understand Marginal Tax Rates

Posted at 1:30 p.m. on Nov. 20, 2012

As “fiscal cliff” negotiations heat up, Matthew Yglesias reminds everyone that the tax debate is really about marginal tax rates.

“The after-tax value of her $250,001st dollar of Adjusted Gross Income will be slightly lower if Obama gets his way than if he doesn’t get his way. But under either scheme, earning a higher pre-tax income will leave you with a higher after tax income. If you want more money, you want to get more more customers and earn more revenue just as usual.”

3comments
Budget & Taxes

Headlines

  • Chredon

    Both individuals and corporations have marginal tax rates, but the tax rates on capital gains are a fixed percentage.

  • Tom_P

    People have a vested interest in misunderstanding tax rates.

  • johnAljohn

    Halle-frickin-ulia! Why is this so HARD for Obama to explain to the American people?? A tax cut on the first $200k/$250k (couples) is a bigger tax break for everyone at and above that line than for anyone below it! Republicans have convinced the media that Obama’s proposal is only a tax cut for the bottom 98%, when the converse is true. It’s for the entire 100%, and bigger for the top 2% than for anyone in the bottom 98%!

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