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View Diary: Do YOU understand how tax brackets work??? (25 comments)

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  •  don't know, maybe I'm confused but back then (1+ / 0-)
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    johnny wurster

    There was a "jump point", here is a description:

    The benefit of the first rate bracket is eliminated by an increased rate above certain thresholds. The phase-out range of the benefit of the first rate bracket was as follows: Taxable income between $71,900 and $149,250 in 1988; taxable income between $74,850 and $155,320 in 1989; and taxable income between $78,400 and $162,770 in 1990. The phase-out of the benefit the first rate bracket was repealed for taxable years beginning after December 31, 1990. This added 5 percentage points to the marginal rate for those by the phaseout, producing a 33 percent effective rate.
    I just remember back then there was a "jump point" where if you made a certain amount your whole tax bill jumped. But I could certainly be mistaken.

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