Graduate Rate Tax

See: Progressive Tax System.

A graduated rate tax is a tax whose rate gradually increases as taxable income increases. You may have heard of a “progressive” tax rate, which is the same thing. The highest earners pay a higher percentage on the top part of their paychecks than on the lower part. The more money you make, the higher the percentage of your money will be taxed.

The system isn't linear. Rather, we live with “tax brackets.” With graduated rate taxes, each tax bracket is taxed an at increasing rate. Think: 10%, then 22%, then 40%. Something like that, depending on which administration is messing things up in the White House.

The opposite of this system is a “regressive” or “flat” tax rate, where all income is taxed at the same rate, regardless of how much money earners earn. See: Regressive Tax Rate for more details.

And if the predatory nature of taxing you at a higher rate the more your earn makes you want to crawl back into your crib and suck on a bankie, then See: Regression Tax Result. Totally different forms you'll need to fill out.