1998 Tax Guide: Marginal Tax Rates

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Marginal Tax Rates

1998 Tax Guide

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Computation of Marginal 1998 Regular Tax Brackets
for Employees (Married Filing Jointly)

1. Assumes state income tax rate is 0%

Taxable Income

Maximum possible 1998 marginal rate on wage income:

greater than $278,050

less than $278,450 but greater than $155,950

less than $155,950 but greater than $102,300

Federal tax bracket

39.60%

36.00%

31.00%

Effect of 3% phaseout of itemized deductions

1.19%

1.08%

0.93%

State income tax bracket

0.00%

Subtract federal benefit of state tax

0.00%

Hospital insurance tax

1.45%

Total maximum marginal rate -- wages

42.24%

38.53%

33.38%

Total maximum marginal rate -- non-wage income

40.79%

37.08%

31.93%

2. Assumes state income tax rate is 5%

Taxable
Income

Maximum possible 1998 marginal rate on wage income:

greater than $278,050

less than $278,450 but greater than $155,950

less than $155,950 but greater than $102,300

Federal tax bracket

39.60%

36.00%

31.00%

Effect of 3% phaseout of itemized deductions

1.19%

1.08%

0.93%

Subtract federal benefit of state tax

5.00%

Subtract federal benefit of state tax

-1.98%

-1.80%

-1.55%

Hospital insurance tax

1.45%

Total maximum marginal rate -- wages

45.26%

41.73%

36.83%

Total maximum marginal rate -- non-wage income

43.81%

40.28%

35.38%

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