A Brief History of Marginal Tax Rates

Research Report

A Brief History of Marginal Tax Rates

September 1, 2003


A person's marginal tax rate, the tax rate on their last dollar of income, may influence their decision to work and save. As marginal tax rates increase, the after-tax reward from working an additional hour or saving more decreases. Although the actual effect on economic decisions is uncertain, economists view the marginal tax rate as a gauge of the efficiency cost of taxation.

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