Quote:
Originally Posted by TheWatchGuy
To bring this into real world examples, there was a time that I was able to work anywhere from 0-40hrs Overtime a week a couple years back. @ 10-20hrs, I was taxed the same as my normal tax rate, so the benefits were there, and I was effectively doubling my hourly rate. @ 20-30hrs, taxes jumped up and my OT rate was ~1.5x my normal rate, so still worth it in my mind. @ 30-40hr mark, taxes again went up significantly, and it dropped my OT rate to a spot where it just wasnt worth killing myself for the extra money.
End of year, I could get a decent chunk back in my tax return, but it was still something that I had an exact amount of OT hours i would work that maximized my labor.
Now, as salaried and percentage based compensation, I make sure I make just enough to stay within a certain bracket, and by December, if Im trending towards going over, i back off on my performance metrics to make sure I stay in that bracket. Does everyone do this? no, but I know there are plenty that do this.
Higher taxes dont encourage people to work harder so they can make more, higher taxes encourage people to game the system to maximize their money. I dont think Ive ever heard of someone saying, "I dont think i paid enough to the government, I'm not going to take advantage of all these tax breaks."
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This is stupid.
It's already pointed out that you'll make more money, regardless of what the "tax bracket" it bumps you into. The next bracket up means every dollar over that amount gets taxed more - but you still get the remainder.