![]() Several studies from prominent economists argue for even higher rates. (She hasn’t said much about what the threshold should be or how many brackets there should be.) So when Ocasio-Cortez says the top tax rate should be 70 percent, she is saying that after we’ve filled all the previous pockets, income should be taxed at 70 percent. In this case, only $800 would get pushed to the next pocket. Rather, it means only the money that doesn’t fit in the previous pockets gets pushed to the 24 percent pocket. So getting a raise doesn’t mean you all of a sudden pay more in taxes. Remember, we need to think of the brackets like pockets. And you owe 22 percent on money in that pocket.īut what if you get a raise and earn another $1,000? Do you get bumped into the next “bracket”? Then you need the next pocket once you earn more than $39,475. Then the income you earn past $9,700 goes into the next pocket. We can find out by looking at the 2019 tax brackets.Ī common mistake is to think you find your bracket and then pay that rate on all of your income. How much do you owe in federal income tax? Let’s say you are an individual earning $84,000 a year. So to clear things up, here’s a simple cartoon explaining how tax brackets actually work in the US. ![]() They’ll say things like, “I got a raise, but it bumped me into the next bracket, so I paid more in taxes.” ![]() Every tax season, I come across an astounding number of people who believe that you find your “tax bracket” and then pay that rate on all your income. But he’s playing on a broader misunderstanding of tax brackets among Americans. Minority Whip Steve Scalise likely knows how tax brackets work and is just using this as a shorthand to attack Ocasio-Cortez’s proposal. Alexandria Ocasio-Cortez January 6, 2019 Oh that’s right, almost forgot: GOP works for the corporate CEOs showering themselves in multi-million bonuses not the actual working people whose wages + healthcare they’re ripping off for profit. How do you not know how marginal tax rates work? ![]()
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