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What You Must Know About Federal Tax Brackets

Federal Tax Bracket

The United States tax system is a progressive model, meaning the tax rates fluctuate based on income earned. As income increases the tax rate attached proportionately rises. The federal tax brackets are aligned based on income. In addition the federal tax brackets are a percentage of the individuals income, therefore, the percentages yield a similar net income taxation model.

The theory behind the progressive system is that those who earn multiple times more than the lowest bracket have an obligation to contribute more towards funding for current expenditures and public services such as the military, the infrastructure, etc.

Federal taxes fund nearly every aspect of the United States government. Transportation, the education system, law enforcement agencies, and the military are all examples of public services funded by the federal tax brackets. The percentage of income levied varies by the individual's amount earned. As of 2009, the federal tax brackets range from 10 percent to 35 percent.

These numbers simply mean that individuals who earn under $8,350 for individuals and $16,700 for married couples will pay 10% of their respective income. This 10% is obviously lower than the other federal tax brackets, however, in relative terms the low income individual is paying a similar amount.

As of 2009, the highest federal tax brackets were 28% (for individuals who earned between $171,551 to $372,950) and 35% (for individuals who earn more than $372,950).

NEXT: What You Should Know About Tax Tables

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