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No it can't, with tax brackets you are not taxed at the top rate for your whole income. Say you make 90k and the tax brackets go 0-15k:0%, 15k-30k:10%, 30k-40k:15%, 40k-50k:20%, 50k-100k:25% 100k+:30%. On the first 15k you make you pay $0 in tax on the next 15k you pay $1.5k, on the next 10k you pay $1.5k, on the next 10k you pay $2k, and on the last 40k you pay $10k. Total tax of $15k(~17% of 90k). Now say you get a raise and are making $110k. On the first 50k you are still only paying $5k, on the next 50k you are now paying $12.5k, and on the last 10k you are paying $3k. Total tax bill $20.5k(~19% of 110k). If you were taxed at the top rate for your total income then the first tax liability would have been $22.5k(25% of 90k) and the second would have been $33k(30% of 110k). That's part of the difference between actual tax rate and effective tax rate, the other part being things like tax incentives, write-offs, and deductions.

this post was submitted on 20 Jan 2024
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