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USA Today Doesn’t Understand Tax Brackets

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"USA Today Doesn’t Understand Tax Brackets"

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Via Dean Baker and Jon Chait, USA Today reminds us that neither its writers nor editors understand how tax brackets work: “That raise actually might not be as good as it looks. The extra money is nice, but it could very well bump you into the next tax bracket, possibly leaving you with less money than you had before the raise.”

Nope. Taxes are assessed on the marginal dollar. For going into a higher bracket to actually leave you with less money, the marginal rate would have to be about 100 percent rather than in the thirties. Getting a raise means you end up with more money.

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