Marginal vs. effective tax rate what does it mean?
Is it time to break out the mason jars and bury my money rather than invest because the tax on dividends will be too high? Somehow the lack of panic here seems almost surreal given the hype elsewhere.
From what I can gather, the media excitement is mostly about marginal tax rate--the highest possible rate, but effective tax rate is more relevant for most people.
To keep things simple: consider a couple who has a combined lower middle class income less than $70K and makes a total of $1000 in dividends in a taxable account. What is the tax rate going to be this year vs. last year?
Thanks in advance for your help. I need to know whether I should buy some glass jars or some more shares in Corning.