At the heart of all the congressional squabbling over the budget is a bizarre quirk in the income tax code known as the "bubble."
The bubble was created in 1986. To simplify the tax code, the old graduated system (in which there were as many as 15 brackets, each subject to a differing marginal rate) was replaced by a new scheme with only two rates: 15% for low-income taxpayers and 28% for everyone else. But achieving that goal required some juggling. For most joint filers, for instance, income below $32,450 is taxed at the 15% rate. To ensure that those who...
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