Quote:
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Originally Posted by KLS
schoolteacher with an adjusted gross income over $28,400 who pays a payroll tax rate of 15.3 percent, plus a marginal income tax rate of 28 percent, for a total marginal rate of more than 43 percent!
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Not true.
It is a progressive tax, so the marginal tax rate on 28,400 would not be 28%.
For someone who is single, making... let's say $36,000, the Federal tax would be calculated as follows:
$7,000 * 10% = $700
$28,400 - $7,000 = $21,400 * 15% = $3,210
$36,000 - $28,400 = $7,600 * 25% = $1,900
Total taxes paid: 700+3210+1900 = $5,810
Actual percentage of adjusted income = 16%
Even adding the payroll tax rate of 15.3, we only have an effective rate of 31.3%