What's a "marginal tax rate"?

What's a "marginal tax rate"?

John Stoller, CPA (Certified Public Accountant) gives expert video advice on: What are "income taxes"?; What is the "IRS"?; What are "tax-favored investments"? and more...

The marginal tax rate is the rate at which each additional dollar of income will be taxed at; for example, we start off with zero, to the extent that you have standard deduction and your personal exemption. Then you start gradually increasing the tax rate; it's a graduated rate depending upon your income amount, which changes every year, what the range is for each rate, but it's a progressively higher rate. Generally, the more you earn, the higher the rate becomes.