Is There a Federal 42 Percent Tax Bracket?
While a 42% federal tax bracket doesn't exist, your combined tax rate can be complex. Learn how federal and state tax systems interact to determine your rate.
A 42 percent federal tax bracket does not currently exist in the United States tax code. The U.S. employs a progressive tax system where higher portions of income are taxed at higher rates across seven federal income tax brackets. For the 2024 and 2025 tax years, the top rate is 37 percent, which applies only to the highest segment of a taxpayer’s income. The reason a 42 percent bracket is a common search query involves the function of marginal rates, state taxes, and historical tax laws.
Understanding Marginal Tax Brackets
The federal income tax system uses marginal rates, meaning different portions of your income are taxed at different rates. This ensures you do not pay the top rate on your entire income. For instance, if a portion of your earnings falls into the highest tax bracket, only the dollars within that specific range are subject to that rate, while income below that threshold is taxed at lower rates.
This system creates two distinctions: the marginal tax rate and the effective tax rate. Your marginal rate is the tax you pay on your last dollar of taxable income and corresponds to the highest bracket your income reaches. In contrast, your effective tax rate is the actual percentage of your total taxable income paid in taxes. This blended rate is calculated by dividing your total tax liability by your total taxable income and is always lower than your top marginal rate.
For example, a single filer with $50,000 in taxable income would not pay a single rate on the full amount. The first portion of their income is taxed at the lowest bracket’s rate, the next portion at the second bracket’s rate, and so on, until all income is accounted for. This tiered system determines a taxpayer’s total tax burden.
Current Federal Income Tax Brackets
The Internal Revenue Service (IRS) adjusts the income thresholds for federal tax brackets annually for inflation. For the 2025 tax year, the rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. A taxpayer’s bracket depends on their taxable income and filing status, which is based on marital and family situation. The most common statuses are Single, Married Filing Jointly, and Head of Household.
A Single filer is unmarried. Married Filing Jointly is for married couples who combine their incomes on one return. Head of Household status is for unmarried individuals who pay more than half of the household expenses for a qualifying dependent.
2025 Federal Income Tax Brackets: Single
| Tax Rate | Taxable Income |
| :— | :— |
| 10% | $0 to $11,925 |
| 12% | $11,926 to $48,475 |
| 22% | $48,476 to $103,350 |
| 24% | $103,351 to $197,300 |
| 32% | $197,301 to $250,525 |
| 35% | $250,526 to $626,350 |
| 37% | $626,351 or more |
2025 Federal Income Tax Brackets: Married Filing Jointly
| Tax Rate | Taxable Income |
| :— | :— |
| 10% | $0 to $23,850 |
| 12% | $23,851 to $96,950 |
| 22% | $96,951 to $206,700 |
| 24% | $206,701 to $394,600 |
| 32% | $394,601 to $501,050 |
| 35% | $501,051 to $751,600 |
| 37% | $751,601 or more |
2025 Federal Income Tax Brackets: Head of Household
| Tax Rate | Taxable Income |
| :— | :— |
| 10% | $0 to $17,000 |
| 12% | $17,001 to $69,250 |
| 22% | $69,251 to $147,650 |
| 24% | $147,651 to $281,850 |
| 32% | $281,851 to $352,300 |
| 35% | $352,301 to $626,350 |
| 37% | $626,351 or more |
The Role of State and Local Taxes
A taxpayer’s total tax obligation is often higher than the federal rate due to state and, in some cases, local income taxes. These taxes are levied in addition to what is owed to the federal government. The combination of federal, state, and local taxes creates a “combined tax rate” that reflects a more complete picture of an individual’s tax burden. This combined rate can approach or surpass 42% for high earners in certain jurisdictions.
Most states have their own income tax systems, which may be progressive or a flat tax, while a few states have no income tax at all. For taxpayers in states with high income tax rates, the additional percentage is added to their federal marginal rate. For example, states like California, Hawaii, and New York have top marginal rates that exceed 10%.
When a high state tax rate is added to the top federal rate, the combined marginal rate can exceed 40%. For instance, a taxpayer in a state with a 13% top marginal rate could face a combined marginal rate of 50% on their highest dollars of income. This does not account for potential local income taxes levied by cities or counties, which can push the total even higher.
Historical and Proposed Tax Rates
The idea of a 42 percent tax bracket has historical precedent in the U.S. federal tax system. Throughout the 20th century, top marginal tax rates were often significantly higher than they are today. For much of the 1950s and early 1960s, the highest federal income tax rate was above 90%, and a 50% top rate existed in the early 1980s.
More recently, discussions around tax policy have included proposals to adjust the current bracket structure. Some proposals suggest creating new brackets for the highest earners with rates above the current 37% top rate. Rates in the vicinity of 40% to 50% for the highest income levels have been part of the public discourse on tax reform.
The current tax rates, established by the Tax Cuts and Jobs Act of 2017, are set to expire at the end of 2025. If Congress does not act to extend them, the rates are scheduled to revert to the previous structure, which included a top marginal rate of 39.6%. This potential change keeps the conversation about higher tax rates relevant.