Why are the tax/income levels so random? Sometimes there’s a 2% increase between levels, and sometimes 10%. The first tax bracket is until $11k, but the ones after that seem completely arbitrary.
Is there a reason for these amounts? Wouldn’t it be simpler/better to just have even numbers?
In: Economics
Location may help add context.
For example, in Canada there are two different marginal scales in effect. Federal and provincial. They have different step sizes and different brackets for each marginal level.
Although the margins look pretty arbitrary, you’d find that independently the federal and provincial margins span broad ranges and the step sizes aren’t all over the place. If you combine them though you end up with roughly double the number of margins, and the step sizes a wide variety. The step sizes are directly traceable back to the independent federal and provincial margins two sizes, but overlaid they look scattered.
This likely covers at least part of the oddity you may be seeing if you’re looking at some kind of combined marginal taxation system.
The brackets not nicely aligning with even numbers is often tied back to inflation increases.
Other oddities can probably be traced back to politicking, lobbying, and budget increases necessitating tax increases, although you’re then talking about individual provinces or states so the specifics are going to vary dramatically.
Latest Answers