&gt; Not really, the US has a nominally &#x27;progressive&#x27; tax rate and there are several bumps when various subsides expire where the marginal rate is much higher than the top tax rate.<p>I&#x27;m not sure what the &quot;not really&quot; refers to. Its true that the US system is only progressive if you look at nominal income tax rates, ignore the different treatment of different sources of income, ignore the main tax on income paid by most working people (payroll tax), and ignore, well, lots of other things.<p>That&#x27;s kind of irrelevant to the point I was making, which had nothing to do with the <i>status quo</i> US income tax system.<p>&gt; So, if you pay 2.5k in student loan interest your effective marginal tax rate increases by ~16% from 65k to 80k.<p>Actually, that&#x27;s wrong, because deductions are not credits. If you got a <i>credit</i> for 100% of student loan interest paid that phased out over the $65k to $80k range, that would be an effective ~16.7% additional tax over that range with $2.5k of interest paid. But its a deduction (which means it reduces your taxable income), so with the marginal rate in that range of 25%, it only increases tax liability by $625, which is a ~4.2% increase in effective tax rate. (Which still breaks progressivity, since the effective marginal rate of 29.2% is slightly greater than the next bracket of 28%, buts its not greater than the top bracket of 39.6%.)