Short #003 · Taxes · Sep 27, 2026
Higher Tax Bracket After a Raise? You Still Come Out Ahead
Why moving into a higher tax bracket doesn't make you earn less
U.S. federal income tax brackets work like buckets: each rate applies only to the dollars inside its own bracket. A raise that crosses into a higher bracket pays the higher rate on the new dollars only. (Rates in the video are a made-up example, not the real brackets.)
Sources
- IRS: "You pay the higher rate only on the part that's in the new tax bracket."
- Benefits cliffs (Federal Reserve Bank of Atlanta)
Educational only. Not financial advice.