# Tax Bracket

*Taxes — Finicade finance glossary*

A tax bracket is a band of income taxed at a particular rate. The persistent myth is that entering a higher bracket taxes all your income at the higher rate — it doesn't. Only the dollars inside each band are taxed at that band's rate, so a raise can never leave you worse off through brackets alone. What can create a genuine cliff is a benefit or credit that phases out abruptly at an income threshold.

**Also known as:** tax brackets, income tax bands, tax rate bands

**Related terms:** [Marginal Tax Rate](https://finicade.com/glossary/marginal-tax-rate), [Effective Tax Rate](https://finicade.com/glossary/effective-tax-rate), [Progressive Tax](https://finicade.com/glossary/progressive-tax), [Taxable Income](https://finicade.com/glossary/taxable-income), [Standard Deduction](https://finicade.com/glossary/standard-deduction)

Source: https://finicade.com/glossary/tax-bracket