Marginal Tax

See: Progressive Tax System. We live in one. That is, the low-earners pay low or no tax. Like...let's say that from zero to 20 grand in taxable earnings, they pay zero. Then from $20k to $50k, they pay 15%. Then from $50k to $100k, they pay 25%. Then from $100k to $250k, they pay 35%.

Well, someone earning $175k in taxable earnings is in the 35% marginal tax bracket. So from their $100,001th dollar, for 75,000 more dollars, they'll pay in taxes on that portion of their income a rate of 35%, or $26,250.