A more thorough explanation:

Marginal tax rate is a percentage of tax that a person pays on the next dollar of income earned. It is different from flat taxes that charge the same rate regardless of one’s income.

A system that uses marginal tax rate requires a taxpayer with a higher income to pay a greater percentage of tax as specified in the income tax bracket. This way, the system seeks to place a higher tax burden on households with greater income and protects low-income taxpayers.

For example, in New York, there are eight marginal income tax brackets, ranging from 4% for the lowest income bracket to 8.82% for the highest bracket. Wider income brackets apply to married couples who file jointly. An individual who independently files one’s tax return will pay 4% for earnings between $0 and $8,500, while a married couple who files jointly will pay the same rate for earnings between $0 and $17,150.

In California, the ten income tax brackets for tax year 2019 vary from 1% to 13.3%.

Since the Tax Cuts and Jobs Act of 2017, the Internal Revenue Service (IRS) has used the Chained Consumer Price Index (C-CPI) instead of the Consumer Price Index (CPI) to calculate the cost-of-living adjustments for each calendar year. For unmarried individuals, the federal income tax brackets for tax year 2020 range from 10% for income up to $9,875 and 37% for income greater than $518,400.

These examples illustrate how marginal tax rate works in different states and at the federal level. The higher the income, the higher the percentage of tax paid. This system aims to make the tax burden more equitable by placing a higher burden on those who can afford it.