I think that's an important point that too many people gloss over, and I want to emphasize it with an example. Let's say the cutoff between 10 and 12 percent brackets is at 10k. If you make 10k one year, you pay $1000 in taxes. If you make $10,001 the next year, you don't pay $1,200.12; you pay $1,000.12. 10% on the first 10k, and 12% on the single dollar that you earned in that bracket.