US marginal an net tax rates

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by ButterflyCatastrophe

I’ve seen a lot of comments about people not understanding marginal tax rates, so I made a graph comparing the marginal tax bracket with the effective tax rate as a function of income. These graphs start at 0, because income up to the standard deduction is not taxed – i.e. the axis is AGI, not taxable income. Tax bracket data for 2018 from the IRS. Log scale, because otherwise all the interesting features are crammed into the left side.

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I was also curious how these rates affect people, so overlaid income distribution below. Income distribution data for 2014 from Wikipedia. Lower income households tend to be single; higher income households tend to be married, with the crossover around $65,000 (6.5e4).

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Graphed in Matlab using plot and bar functions.

Edit: same graph, but including payroll taxes:


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