Final answer:
Personal income tax rates in the United States are structured within a progressive tax system, where tax brackets correspond to different income ranges and marginal tax rates increase with higher income.
Step-by-step explanation:
Personal income tax rates vary according to different income ranges, or tax brackets. The United States employs a system known as progressive taxation, where individuals with higher incomes are subjected to higher tax rates. Essentially, as a person's income increases, they move into higher tax brackets, causing them to pay a larger fraction of their additional income in tax.
In a progressive tax system, the marginal tax rates indicate the tax rate applied to the last dollar earned and only affect income within specific ranges defined by these brackets. For instance, in 2010, there were six federal income tax rates for single taxpayers, ranging from 10% to 35%. Moreover, the tax tables and rates are periodically updated to reflect economic changes such as inflation, and there were seven tax rates in 2023: 10%, 12%, 22%, 24%, 32%, 35%, and 37%, each applicable to different ranges of income.
If we consider a single person making $15,000, the first segment of their income up to a certain threshold, say $11,000, would be taxed at the lowest bracket of 10%, while the income exceeding $11,000 and up to $15,000 would fall into the next bracket and be taxed at 12%. This tiered system ensures fairness across different income levels and is designed to proportionately tax individuals based on their ability to pay.