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Marginal vs. Effective Tax Rates Explained

YouTubeMason and Associates

Marginal vs. Effective Tax Rates Explained

Ever wonder why your “tax bracket” isn’t the same as the rate you actually pay? The U.S. uses a graduated tax system—meaning only portions of your income are taxed at each bracket. That’s why your effective tax rate (your true tax rate) is lower than your marginal rate. Here’s a quick breakdown to help you understand the difference ...

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