Despite the actual tax rate reductions for this Jobs and Growth Tax Relief Reconciliation Act of 2003, tips for sites marginal income tax bracket for many retirees is really a whopping 46.3%. Why? Because Social Security benefits are subject to income taxation. Those affected are Social Security recipients who hold the good fortune (misfortune?) to get subject to both the 25% tax bracket along with the 85% inclusion rate for Social Security benefits. You hadn't committed fraud or willful ...