EFFECTIVE MARGINAL TAX RATES UNDER THE FEDERAL INDIVIDUAL INCOME-TAX - DEATH BY 1000 PIN PRICKS

The federal personal income tax has six statutory marginal tax rates: zero, 15 percent, 28 percent, 31 percent, 36 percent, and 39.6 percent . Because of the design of certain provisions of the Internal Revenue Code, an effective marginal tax rate may not always correspond to the statutory marginal tax rate. Recently, the staff of the Joint Committe e on Taxation prepared a report identifying those provisions that caus e a taxpayer's effective marginal tax rate to differ from his statutor y marginal tax rate. This paper summarizes that study and discusses th e consequences of these provisions on the efficiency, equity and compl exity of the federal individual income tax.