A tax rate is a percentage at which an individual or corporation's income is taxed. The United States uses a progressive tax rate system imposed by the federal government and many states. The federal income tax brackets for 2024 and 2025 are 10%, 12%, 22%, 24%, 32%, 35%, and 37%.

With such a system, the tax rate charged increases as the amount of the person's or entity's taxable income increases. A progressive tax collects more money from taxpayers with higher incomes.