Application
The tax rate schedules give tax rates for given levels of taxable income. There is a complex relationship between taxable income and actual income, making it difficult to draw conclusions from the tables. Even the marginal tax rates are misleading because there are various laws that relate taxable income to actual income such that in increase of a dollar of actual income results in an increase of more than a dollar in taxable income, thus making the marginal tax rate greater than what is suggested by the table.
These schedules apply only to regular US income tax, whereas there is a second income tax, the Alternative Minimum Tax, that uses a different schedule. A taxpayer's tax obligation is the higher of those two income taxes, which makes drawing conclusions from the table even more difficult.
Read more about this topic: Rate Schedule (federal Income Tax)
Famous quotes containing the word application:
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—Philip Dormer Stanhope, 4th Earl Chesterfield (16941773)
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—Henry David Thoreau (18171862)
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—Clara Barton (18211912)