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For at least twenty-five years, tax commentators have
pointed out that the Internal Revenue Code's rate schedules,
which now start with a rate of 14 percent and rise to a top rate of
70 percent, are misleading. One source of confusion is the
difference between the marginal rate applicable to a taxpayer's
final dollar of taxable income and the average rate applicable to
his taxable income as a whole. A married couple with $20,000 of
taxable income, for example, is subject to a rate of 14 percent on
their first $1,000 and to gradually increasing rates on additional
increments to their income, until a rate of 28 percent is reached
on their last $4,000 of taxable income. But their actual tax
liability is $4,380, or about 22 percent of their taxable income of

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