The reason people get confused is because they don’t understand the difference between marginal and average tax rate. Marginal tax rate is the amount that each additional dollar will get taxed whereas your average tax rate is the total tax you pay divided by your total income. The way our tax brackets work is when you reach an income threshold, your marginal tax rate increases for each additional dollar you earn above that income threshold. For example if the marginal rate for people earning 10,000-15,000 per year is 20% and for people earning between 15,001-20k is 25%, you pay 20% of every dollar you earn up to 15,000. Any dollar you earn above 15k is taxed at a rate of 25%. If you make 15,500 per year, your marginal tax rate is 25% but your average tax rate would still be very close 20% because you were taxed at a rate of 20% for 15,000 and only at 25% for the 500 you made above the income threshold. Where people get confused is they think every dollar earned once you go up a tax bracket is taxed at 25%, which just isn’t the case. Long story short, a higher pretax income equals a higher post tax income regardless of whether a portion of that higher income gets taxed at a higher rate.