How tax brackets actually work

There is a common misunderstanding about how tax brackets work in the US, and it’s causing us to have uninformed debates about taxes.

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The TEx crew took a deep dive into Representative Alexandria Ocasio-Cortez’s proposal for a marginal tax rate of 70% for top earners in America. A lot of people are upset, and even more have no idea how it works.

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When Rep. Alexandria Ocasio-Cortez proposed a 70 percent top income tax rate, many conservatives started saying Democrats wants to take away 70 percent of Americans’ hard-earned money. This is not only wrong, but it takes advantage of something Americans have long misunderstood: tax brackets. It’s time to fix that with a simple, paper-made video.

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14 thoughts on “How tax brackets actually work

    1. Vox So, is there limitations on what can be out into what pockets? Like, isn’t capital gains taxed at a different rate than a job salary would be? How does that change things? Or does it?

    2. +michiel spaapen I won’t be surprised, we aren’t the highest or the lowest, that doesn’t mean we should raise taxes. The point is keeping taxes low.

  1. This is taking me back to the rolling calm of the TV stand coming into classroom, turning on some Mathnet.

    Well done!

  2. American taxes are a government ran scam; most Americans don’t know Israel gets $3.8 billions /year for free ; without them giving anything in return. Banks, the IRS, The Fed, and government; made America into what it’s today: a homeless nightmare; an uneducated, unemployed drug addiction nation. How sad.

  3. How do people not know this? I learned how tax brackets work and how to calculate this in economics class as a 13 year old. But hey, I live in a country where the top tax bracket (+68.500 euros, around 78.000 dollars) is taxed at 52%. Maybe they’ve spent that money wisely and invested in proper education…

  4. Or we can get a flat tax system. Someone who makes $70k is taxed at 16% but it’s their whole income. So the calculation would be $70,000 *0.16 and it’d come to the same as this

  5. For people commenting saying things like “how do people not know this???”
    I am in personal finance in High school and this is not what we are taught so that is maybe why people do not know this

  6. Now you see why Democrat controlled municipalities always go bankrupt. They watch videos like this.

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