Income taxes fund important services like libraries, road construction, unemployment insurance, and much more. But there’s a LOT of confusion about how they ACTUALLY work!
The U.S. has a “progressive” tax system, which means that the more you make, the more federal income tax you’ll owe. But it’s not that simple.
Some people worry about paying more when they go into a “higher tax bracket,” but progressive tax systems don't actually work like that!
Here’s how it actually works: NOT ALL of your income is taxed at the same rate! Here are the brackets and rates:
Income between $0 and $9,875 is taxed at 10%.
Income between $9,876 and $40,125 is taxed at 12%.
Income between $40,126 and $85,525 is taxed at 22%, etc.
This is true NO MATTER your total income! ONLY the income WITHIN a bracket is taxed at that bracket’s rate.
There’s a LOT of misinformation about taxes in politics. When Trump lowered taxes, it only really affected the rich! And when Joe Biden talks about raising taxes, he’s only planning to raise rich peoples’ taxes back up.
We have to know the truth about taxes so we won’t be manipulated – and make sure we vote for policies and representatives that are ACTUALLY in our best interest!