Tax brackets determine the rate at which income is taxed from "summary" of Income Tax Fundamentals 2021 by Gerald E. Whittenburg,Martha Altus-Buller,Steven Gill
Tax brackets are an essential element of the income tax system, as they play a crucial role in determining the rate at which income is taxed. The U. S. tax system is progressive, which means that as a taxpayer's income increases, so does the tax rate applied to that income. This progressive structure is achieved through a series of tax brackets, each with its own corresponding tax rate. When a taxpayer earns income, it is first categorized into different tax brackets based on specific income thresholds. Each tax bracket has a set tax rate that applies to income falling within that range. For example, income up to a certain amount may be taxed at a lower rate, while income above that threshold is taxed at...
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