Quote:
Originally Posted by longsuffering
Can someone help me understand this chart from the Budget document?
My understanding that the only tax relief in the budget was the increase in personal exemptions and the increase in the amounts taxes at the 2 lowest tax rates, but the savings for higher income earners continue to grow.
Wouldn't tax savings be maxxed out at $80,000?
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I took out the chart in the interest of space, but basically its because everyone gets to claim the new minimum exemption of $10k when before it was $9k. Also, because as you earn more money the tax savings from the changed tax brackets also save you some money. You pay the tax on the money as you go into the new tax bracket, but don't pay the whole amount on every dollar underneath it. Say you earn $85k. You still save money on the first $80k.(I hope that this makes some sense!)