The rate at which income over a certain amount is taxed. Although in general, graduated income taxes impose higher tax rates on higher incomes, the tax rate does not rise for each additional dollar earned. Rather, it rises by income brackets, and each tax rate applies only to income that falls in that bracket. For example, in 2002, the highest marginal federal tax rate was 38.5 percent, which for single taxpayers was imposed on income in excess of $54,000.
The New Dictionary of Cultural Literacy, Third Edition Copyright © 2005 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.
How to use marginal tax rate in a sentence
If two single people each earn $50,000, they will each pay the marginal tax rate that applies to $50,000.Gay Marriage Is About Taxes, Too! And Now the Code Is Finally Fair. | Daniel Gross | June 26, 2013 | THE DAILY BEAST
Under Obama's plan, it's true that the top marginal tax rate will only affect about $1,000 worth of their income.Should People Who Make $250,000 a Year Worry About Obama's Tax Proposals? | Megan McArdle | November 20, 2012 | THE DAILY BEAST
And hey, while we're at it, let's return the top marginal tax rate to the 50 percent it was in 1982 and 83.