A range of incomes taxed at a given rate.
- The basic idea is that you are not taxed on the funds until you withdraw, at which point you are taxed at the rate of your income tax bracket.
- From an economic point of view, only the marginal income is relevant, that is the income in the highest tax bracket.
- During World War II, policy makers pushed the income tax downward but also raised the top tax bracket, this time to 94%.
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