Research & Analysis for Business
and Investment Clients
Incentives drive behavior. How does the United States personal income tax schedule incentivize taxpayers?
Federal tax tables define distinct tax brackets with rates ranging from 10-35%. A plot condensing this information into one graph is presented in Figure 1.
Figure 1. Total taxation as a function of taxable income & filing status (derived from 2009 tax table). Dashed lines identify the alternative minimum tax zero exemption thresholds for 2009.
Note 1: In 2010 the AMT exemption is scheduled to decrease to $33,750 (single), $45,000 (joint), and $22,500 (separate). In 2009 the AMT exemptions were $46,700 (single/head), $70,950 (joint), and $35,475 (separate).
Figure 2. Total taxation as a function of taxable income & filing status (derived from 2009 tax table). Use this log-log plot to see how much your taxation changes with filing status.
Note 2: For 2009 the zero exemption thresholds were $299,300 (single/head), $433,800 (joint), and $216,900 (separate).
Disclaimer: Onyx Research, Inc. does not provide tax advice. Consult your tax advisor to optimize your tax situation.
Data Source: Internal Revenue Service