4 ms·

Similar to how some families have to actively avoid making too much money, lest they jump into a higher tax bracket and end up losing more than they gained (whi

Similar to how some families have to actively avoid making too much money, lest they jump into a higher tax bracket and end up losing more than they gained (while the next-next bracket remains a distant dream).

Lawtonfogle 12y ago
Except that in that one case, at least in the US, only the income inside the new tax bracket is taxed at the higher rate. The tax brackets are actually something they have right (I'm not saying I agree with the tax rates, only that earning a dollar more in income will never cost you a dollar or more in tax).
- zaroth 12y ago
  Many parts of the curve are net negative marginal income. It's not just higher tax rates on the additional dollars, it's decreasing subsidies, and phased-out deductions; the 3 forces work in concert to make earning more actually (literally) taking home less.
  - Domenic_S 12y ago
    That's precisely what GP originally said. Here he was clarifying that tax brackets themselves don't work this way, although government assistance can. In graph form: http://1.bp.blogspot.com/-_-6Fsycanmw/ULO_5kk3fxI/AAAAAAAAAU4/y1PbUElDS34/s1600/marginal-tax_6.PNG http://1.bp.blogspot.com/-_-6Fsycanmw/ULO_5kk3fxI/AAAAAAAAAU...
- jrs235 12y ago
  Don't forget pay raises that come with promotion often include more responsibilities. So then if the raise is net negative or even, are the increased responsibilities (and possible time committments) worth less?
  - Lawtonfogle 12y ago
    I've found that businesses will give you the responsibilities regardless and denying the raise won't change your increased responsibilities. Granted, the US's work culture does appear more toxic than in other places in regards to how employees are treated.
Domenic_S 12y ago
That is a common misconception, a raise will never cost you more in that way. Sometimes a raise will send you out of an income range that qualifies for State assistance though, like the GP said, with the assistance being worth more than the raise.
- thirdtruck 12y ago
  Yes, that's a better description of the problem I was trying to capture.

Lawtonfogle 12y ago

Except that in that one case, at least in the US, only the income inside the new tax bracket is taxed at the higher rate. The tax brackets are actually something they have right (I'm not saying I agree with the tax rates, only that earning a dollar more in income will never cost you a dollar or more in tax).

zaroth 12y ago
Many parts of the curve are net negative marginal income. It's not just higher tax rates on the additional dollars, it's decreasing subsidies, and phased-out deductions; the 3 forces work in concert to make earning more actually (literally) taking home less.
- Domenic_S 12y ago
  That's precisely what GP originally said. Here he was clarifying that tax brackets themselves don't work this way, although government assistance can. In graph form: http://1.bp.blogspot.com/-_-6Fsycanmw/ULO_5kk3fxI/AAAAAAAAAU4/y1PbUElDS34/s1600/marginal-tax_6.PNG http://1.bp.blogspot.com/-_-6Fsycanmw/ULO_5kk3fxI/AAAAAAAAAU...
jrs235 12y ago
Don't forget pay raises that come with promotion often include more responsibilities. So then if the raise is net negative or even, are the increased responsibilities (and possible time committments) worth less?
- Lawtonfogle 12y ago
  I've found that businesses will give you the responsibilities regardless and denying the raise won't change your increased responsibilities. Granted, the US's work culture does appear more toxic than in other places in regards to how employees are treated.

Domenic_S 12y ago

That is a common misconception, a raise will never cost you more in that way. Sometimes a raise will send you out of an income range that qualifies for State assistance though, like the GP said, with the assistance being worth more than the raise.

thirdtruck 12y ago
Yes, that's a better description of the problem I was trying to capture.