Marginal Tax Rate

See: Marginal Tax. See: Progressive Tax.

The marginal rate is the percentage of tax you pay on that last dollar you earned. Like...in the U.S. income tax system, we "graduate" rates, from zero percent from dollar one to dollar, say, 20,000. There are break points of 10%, 20%, 30%, 40% along the way, such that if you had taxable wages of, say, $122,000 last year and a 30% breakpoint happened at $100,000, then you'd pay a marginal tax rate of 30% on that last $22,000 you earned.