married and have combined income of $86,700.00. in 2010 they will pay income taxes of $9,362.50 with an effective tax rate of 10.8%. their 2010 after-tax income is $77,337.50. in 2011 they will pay income taxes of $10,200 with an effective tax rate of 11.8% which represents a tax increase of 8.9%. their after tax income in 2011 will fall by $837.50.
example 3 – 25% bracket: nick and nancy are married and have combined income of $156,000.00. in 2010 they will pay income taxes of $26,687.50 with an effective tax rate of 17.1%. their 2010 after-tax income is $129,312.50. in 2011 they will pay income taxes of $29,604.00 with an 