"That is total baloney. "
No, it's not. You can have a top marginal tax rate of 99%, but if it's only for income over $100 Billion, what does it matter? Back in the 90% Eisenhower days, there were lots of loopholes and deductions. Virtually no one paid 90%, and absolutely no one paid a 90% effective rate.
Here's the difference. Marginal rates are the amount paid on the last dollar of income. If you're in the 22% Federal Bracket and 5% State Bracket, your marginal rate is 27%. But your effective rate is definitely lower, because you have deductions, as well as lower brackets to pass through on your way to the 22% bracket. For example, your first $9525 of taxable income (if you're single, it's the amount over $12K) is paid at a 10% rate. So is Warren Buffet's first $9525.
So, let's do the math: Let's take a single woman with income of $31, 525. She'll get a $12K Standard Deduction. The next $9525 will be taxed at 10% ($952) and the next $10,000 will be taxed at 15%, or $1500, for total income taxes of $2452. She's in the marginal bracket of 15%, since her last dollar was taxed at 15%. But her effective rate is only 7.78%. It's her total taxes (2,452) divided by her total income (31,525).
Anyone wanting to play the home game version:
Grab last years taxes and look at your 1040, Line 63, your total taxes. Divide that number by Line 22, your total income. That's your effective rate.
Next, go to line 43, and subtract $1000 from that number. Compare the difference in what you'd owe to the government. For 2017, if it's $150, you're in the 15% marginal tax bracket. If it's $250, you're in the 25% marginal tax bracket. If it's between those numbers, one of two things is going on: either you just broke into the higher tax bracket with the last $1000 you earned, or those earnings moved some other number, for example made Social Security a little more taxable.