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From: stevev@tekchips.UUCP (Steve Vegdahl)
Newsgroups: net.taxes
Subject: Re: Tax Bracket Question
Message-ID: <667@tekchips.UUCP>
Date: Wed, 4-Apr-84 12:18:24 EST
Article-I.D.: tekchips.667
Posted: Wed Apr  4 12:18:24 1984
Date-Received: Sat, 7-Apr-84 02:35:53 EST
Organization: Tektronix, Beaverton OR
Lines: 17

A number of people have pointed out that the marginal tax rate is
discontinuous in a "micro" sense due to the resolution of the tax tables.
I believe that it is the case that if you claim the child care credit, you
may find a the marginal tax rate being discontinuous due to the discretely
decreasing rate at which the credit is computed as income increases in
the $20K-$30K range.  If child care expenses are $2K then

	income		rate		total credit
	$27,999		21%		$420
	$28,001		20%		$400

(I might have the percentages off by a point or two, but you get the idea.)
With the maximum allowable credit for multiple children, this discontinutity
could be as high as $48, even if schedules X/Y/Z are used.

		Steve Vegdahl
		Tektronix, Inc.