Progressive system, marginal rates
The federal income tax is progressive, meaning that tax rates increase as your taxable income goes up. As of publication, for example, income was taxed at seven rates: 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, 35 percent and 39.6 percent. These are marginal rates, meaning that each rate applies only to a specific slice of income rather than to your total income. The rate that applies to the top slice of your income is your tax bracket.