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> if he worked too many overtime hours (which came around from time to time), would get into the next tax bracket and it wouldn't be worth it By "not worth it"
by adwn 10y ago
> if he worked too many overtime hours (which came around from time to time), would get into the next tax bracket and it wouldn't be worth it
By "not worth it", I suppose you mean that he valued the marginal increase in income less than the marginal decrease in free time – which is entirely subjective and different from person to person? I don't see your point.
- rascul 10y agoIn the higher tax bracket, he didn't work enough overtime to offset the increased taxes and ended up with a smaller check than if he worked less. At least that's what he claimed.
- adwn 10y agoThis is not possible with a progressive tax system. It is likely that he misunderstood tax brackets, average tax rate, and marginal tax rate.
- flukus 10y agoNot with taxes alone, but welfare cliffs can kick in: http://www.learnliberty.org/blog/the-welfare-cliff-and-why-many-low-income-workers-will-never-overcome-poverty/ http://www.learnliberty.org/blog/the-welfare-cliff-and-why-m...