Research report A Brief History of Marginal Tax Rates
Elaine Maag
Display Date
File
File
Download Report
(215.83 KB)

A person's marginal tax rate, the tax rate on their last dollar of income, may influence their decision to work and save. As marginal tax rates increase, the after-tax reward from working an additional hour or saving more decreases. Although the actual effect on economic decisions is uncertain, economists view the marginal tax rate as a gauge of the efficiency cost of taxation.
Primary topic Federal Budget and Economy
Research Area Federal Budget and Economy Individual Taxes