And, they calculate that the marginal effective tax rate on investment by a U.S. firm in a low-tax country is, remarkably, a negative 24 percent.
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They ignore the fact that there is a difference between your marginal tax rate and your effective tax rate.
In addition, the effective marginal tax rate on labor income would rise from about 28 percent now to about 36 percent in 2037.
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Next year in California the effective top marginal tax rate on corporate dividends rises to 74%.
This is similar to one of the scenarios predicted earlier, but the question up until the last minute has been at what income level would the older, higher top marginal tax rate be effective.
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However, most tools will use the marginal rate of your highest tax bracket rather than your effective tax rate.
So it makes sense to lower the top marginal rate even if you have to eliminate deductions to collect the same effective tax rate.
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Add it together and families in the 33% tax bracket could see their effective marginal rate paid on each additional dollar earned rise to above 38%.
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France has long seen income tax as a mechanism for soaking the rich, who currently pay an effective marginal rate of around 60%.
If no further action is taken by Congress, the maximum individual income tax bracket would increase to a stated rate of 39.6%, but an effective marginal rate of 40.8% for most high-bracket taxpayers due to a limitation on itemized deductions that would also come back in 2013.
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