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Understand Our Progressive Rate & Bracket Tax Structure

Our tax system is characterized by a progressive rate and bracket structure and accounts with special tax rules designed to incentivise specific behaviour. It is difficult to explain the rate and bracket structure of our tax system without using a fictional, simplified rate and bracket structure. I’ve delivered tax system explanatory presentations using the actual rate and bracket structure and eyes gloss over quickly. It doesn’t work. Now I start out with this. A simplified, fictional tax structure with three tax brackets and progressive rates. We go through examples. If taxable income is $40,000, tax is $4,000. My average and marginal tax rate are both 10%. If I get a raise to $49,

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