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Impact of proposed tax increase for high earners would be marginal

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Editor's note: This story has been updated to clarify that under the Obama administration's proposed revisions to income tax rates, taxpayers in the highest tax bracket would not only pay a higher marginal tax rate on income above $398,350, but would also be affected by proposed adjustments to the lower brackets and other changes.  The Republicans in Congress and President Obama are in the process of fighting World War III over tax rates for upper-income taxpayers. The president wants to raise rates on taxpayers earning more than $250,000 per year. The Republicans introduced a plan, later withdrawn, to increase rates only on those earning more than $1 million per year. With all this going on, now is a good time to understand the term "marginal tax rate," because that is what all the fighting is about. It sounds complicated, but it's actually very simple: Your marginal tax rate is the tax you pay on your next dollar of income. For example, if your marginal tax rate is 28 per...