The Bracket Myth

The most expensive tax misconception in America: "If I earn more, I'll move into a higher bracket and take home less."

This is wrong. The US uses marginal tax brackets. Only the money within each bracket gets taxed at that bracket's rate — not all your income.

Example: in 2025, the 22% bracket starts at $48,475 for single filers. If you earn $50,000, only the $1,525 above that line is taxed at 22%. The first $11,925 is taxed at 10%, and the next $36,550 at 12%. Your effective tax rate works out to about 12% — not 22%.