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Lesson 7/12Fill the rate stacks10 minFree lesson

A higher bracket changes only the next slice

Fill progressive bands one slice at a time and retire the myth that one higher bracket reprices all income.

Each band taxes only its own slice

A progressive schedule is a stack of slices. Each slice has a width and a rate, and total bracket tax is the sum of each slice's tax.

The marginal rate describes the next slice. The effective rate averages the modeled total across included gross income.

Find the first band that changes

Open the ordinary stack in both checkpoints. The earlier bands are identical; the change appears only at the top of the stack.

Calculation replay

Predict, change, inspect.

Can crossing a bracket make take-home income fall below the pre-raise amount in this income-tax model?

  1. 01Income
  2. 02Deduction
  3. 03Rates
  4. 04NIIT
  5. 05Payments

Calculation replay ready.

Scenario

Avery receives a raise while every other input stays fixed.

Increase wages by $2,000 across a modeled bracket boundary.

Read the baseline, make a prediction, then play the change.

Gross income
Taxable income
Regular income tax
NIIT
Total tax
Balance

Related references

Concepts used in this lesson

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