How Do Tax Brackets Work?
Understanding how tax brackets work can inform decisions about performing extra work through a second job or overtime, or pursuing new streams of income.
Our animated explainer videos are designed for the classroom, social media, and anyone looking to boost their tax knowledge on the go.
Understanding how tax brackets work can inform decisions about performing extra work through a second job or overtime, or pursuing new streams of income.
The better you understand taxes, the better equipped you are to make decisions about them. All taxes can be divided into three basic types: taxes on what you buy, taxes on what you earn, and taxes on what you own.
Taxes have played a major role throughout history, and even date back to around 5,000 years ago. Taxes will continue to affect our lives and shape our societies just like they have for thousands of years.
Simplicity in the tax code means taxes should be easy for taxpayers to pay and easy for governments to administer and collect.
Neutral tax codes don’t play favorites or try to influence personal or business decisions but stick to what they’re best at – raising sufficient revenue through low rates and a broad base.
When the tax code is stable and predictable, individuals, families, and businesses can set goals for the future and make plans to achieve them.
Every so often, you will see headlines highlighting large companies that pay little or no corporate income tax. While these stories may seem shocking, the reality is much more mundane.
Raising the corporate income tax is often promoted as a way to generate revenue for helpful government services. Unfortunately, higher corporate taxes typically hurt the very people they’re supposed to help through lost wages and fewer opportunities.
Since only U.S. businesses pay the GILTI tax, not foreign businesses, it makes U.S.-based brands less competitive abroad. Whatever its intentions, GILTI is a flawed policy, and doubling down on it will hurt us abroad, and at home.