Define Goods and Services Tax: GST Explained Globally
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Key terms
- Tax BracketThe range of income subject to a certain income tax rate in the progressive US tax system. Higher income levels are taxed at higher rates (marginal tax rates).
- Marginal Tax RateThe tax rate applied to your last dollar of income. In the US progressive tax system, different portions of income are taxed at different rates.
- Tax CreditA dollar-for-dollar reduction in taxes owed. More valuable than deductions, which only reduce taxable income. Examples include Child Tax Credit and Earned Income Tax Credit.
- Tax DeductionAn expense that can be subtracted from gross income to reduce taxable income. Common deductions include mortgage interest, student loan interest, and charitable contributions.
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