Talk:Marginal tax rate

A summary from various sources, references listed. I'd like a 2nd opinion to check for errors or omissions (or "OK"). LadyGeek 19:18, 6 February 2009 (UTC)


 * Looks fine to me. I like the google:define touch also. It might be a good idea to add one these to all glossary entries. Blbarnitz 21:47, 6 February 2009 (UTC)


 * What are you referring to when you say, "a flat tax has a marginal rate of zero"? A flat rate tax has a constant marginal rate, not zero; a tax with a marginal rate of zero is a fixed-amount tax, such as a tax of $100 on every house rather than a percentage of the value of the house.Grabiner 04:37, 7 February 2009 (UTC)


 * David, I went ahead and substituted your wording. I think we've nailed it. Blbarnitz 09:02, 7 February 2009 (UTC)


 * David, Barry - That's why I asked for a review. My bad. I took the last sentence of the Wikipedia section for Marginal and removed the word "poll" from "poll tax". Original wording was "A flat rate poll tax has a marginal rate of zero,...". I didn't realize this was an error. The house tax example above clearly explains what I did wrong and is now on the main page. LadyGeek 19:34, 7 February 2009 (UTC)

Marginal Tax Rate Calculations
Could you please show how you got the marginal tax rates of of 27.75% and 46.25% (with explanation)? I couldn't reproduce these results, so I'm missing something. Also, it might help to say "each additional $1" instead of "each $1" to be clear that this is marginal.
 * If you are in the range in which Social Security becomes taxable, each $1 of income causes an extra 50 or 85 cents of Social Security to be taxable at the same tax rate, until 85% of the whole benefit is taxable. If you are in the 15% bracket and each $1 causes 85 cents to be taxable, your marginal tax rate is 27.75% ; if you are in the 25% bracket at each $1 causes 85 cents to be taxable, your marginal tax rate is 46.25%

LadyGeek 16:43, 11 October 2009 (UTC)
 * If you earn an extra $100 and each $1 causes 85 cents to be taxable, your taxable income increases by $185, and in a 15% tax bracket, you pay $27.75 tax on that $185. Thus the marginal tax rate is 27.75%.  A clarification will be added.Grabiner 00:33, 12 October 2009 (UTC)
 * The example is now computed in detail at Taxation of Social Security benefits.Grabiner 01:13, 13 October 2009 (UTC)
 * Now I understand, thanks. LadyGeek 22:13, 13 October 2009 (UTC)

Why is the statement below important for a marginal tax rate? Is it because corporate and municipal bonds are not taxable and therefore the after-tax rate is the same as before-tax rates?
 * "If your marginal federal tax rate is 25%, then a corporate bond fund with a 4% yield and a municipal bond fund with a 3% yield have the same after-tax value to you."

LadyGeek 22:13, 13 October 2009 (UTC)

Reader feedback: Please give a real example, ...
24.254.55.6 posted this comment on 1 March 2014 (view all feedback).

"Please give a real example, such as: The social security statement says when I retire next year (early retirement) I will start collecting social security of $1,923. My other income (State retirement income) will $2,200 per month. What will my social security tax be? Thanks"

Any thoughts?

Blbarnitz 03:13, 2 March 2014 (CST)

The reader may be wishing to have an example which matches his/her situation. Using Social Security presents a more difficult problem and is better addressed in Taxation of Social Security benefits.

The examples currently shown intentionally do not go into any detail because tax law complexities arise. At a detailed level, we may provide advice based on incomplete information and risk giving an incorrect (or misinterpreted) answer. For the purposes of a simple illustration, I believe the existing examples are sufficient. --LadyGeek 14:50, 2 March 2014 (CST)