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This is a common myth, but you'll never get less money in your account by earning more. Never. (If other conditions remain the same, naturally)
by raverbashing 5y ago
This is a common myth, but you'll never get less money in your account by earning more. Never. (If other conditions remain the same, naturally)
- AnthonyMouse 5y ago> This is a common myth, but you'll never get less money in your account by earning more. Never. (If other conditions remain the same, naturally) That wasn't the original claim. If you're paying a high marginal tax rate, you may be making a nonnegative amount of money, but that doesn't mean it's a sufficient incentive to get you to do work when you'd sooner play video games. But on top of that, it isn't even true. It's not unheard of for marginal rates in practice to exceed 100% as a result of overlapping benefits phase outs. You pay a 25% tax rate, an education benefit phases out at a rate of 25%, a housing benefit phases out at a rate of 30%, a childcare benefit phases out at a rate of 25%, you earn an extra $1 and the government takes $1.05. This also doesn't account for the cost of earning the money. Your boss offers you an extra half shift, but then you pay the commuting cost (say $10) for 4 hours instead of 8. If your hourly rate is $10, maybe you still take it and make $30. If it's $10/hour but there is a 50% marginal rate, you spend two hours commuting and four hours working to come home with $10/day, and screw that. If the marginal rate was 80%, you're nominally "making" $8/day but in practice you're losing $2/day (and the six hours of time).
- volta83 5y agoNo, but you can earn more per year and earn much less per hour of work. That’s the problem with Tesla in Germany: annual salary is 10-20% higher, hourly salary is 30% lower. My friends quitting lost in yearly salary, but won huge in hourly rate.