# Taxing the "rich" **URL:** \ **Category:** The BBQ Pit\ **Created:** [July 24, 2011, 9:14pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209 "2011-07-24T21:14:54Z")\ **Posts on this page:** 20\ **Page:** 23
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [August 10, 2011, 7:53pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/441 "2011-08-10T19:53:56Z")
> [@perfectparanoia](#): > > If my husband were to quit his job and become a SAHD (I make more and I like my job) we would probably save about 300 dollars in taxes alone. This would be because my taxes would go down. I could claim a lot of things that we are currently unable to claim (since we make too much) and I can claim him as a dependant. > > 300 dollars is a goodly amount. It could be the make or break point for us if we were willing to give up other things (two cars, yearly vacations). > > Now, granted, I am in Canada so that probably makes a pretty big difference. Ummm. you’d save more than $300, since you’d also save the taxes he now pays, but you’d give up all the income he now makes. Unless his income is less than your incremental savings in taxes, you lose. I neglect the other savings from not working, of course. My wife is a freelancer, and we’re in a fairly high bracket, so her income is taxed at the incremental rate. There is no point at which it does not make financial sense for her to take on additional work - sense in terms of sanity is something else. ---
**Author:** ![curlcoat](https://avatars.discourse-cdn.com/v4/letter/c/ea5d25/32.png) [@curlcoat](https://boards.straightdope.com/u/curlcoat)\ **Post date:** [August 11, 2011, 1:21am UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/442 "2011-08-11T01:21:36Z")
> [@sh1bu1](#): > > It seems like almost every point you made is invalid: > > 1. You stopped working before you knew what the tax affects were, and still don’t know what they are, so I don’t see how tax rates could have influenced your decision. Except I never said they did - I quit working because I had to. It was only after that something I’d been suspicious of appeared to be true - it really didn’t make any difference to our finances if I worked or not. But of course, since you couldn’t even bother to read/understand/stay with my original point, I guess it is no surprise that you are making assumptions that have been previously addressed and discounted. > [@](#): > > 1. Tax rates have gone down, not up, so you have made the point that lowering taxes enables people to stop working. Uh, yes? You haven’t been paying attention at all? We are paying (a lot) less tax - I am not working. > [@](#): > > 1. The fact that you do not miss \>$10K a year is a clear demonstration that the marginal utility of money decreases with higher income. This is one of the theoretical basises for progressive tax rates. Again with a dollar amount you pull out of your butt… So, your point one is invalid, your point two agrees with me and your point three has a mystery number and a point that has nothing to do with anything I’ve said. Good job. > [@quixotic78](#): > > Are you serious? You’re so evasive and excuse-laden, you make Tony Soprano look like a paragon of honest forthrightness. What do you call this, if not an excuse? An insult. > [@](#): > > Passing over the connection to taxes for the moment, you’re making one of the most obvious statements ever – people might not want to put in more effort if the return is not commensurate. I suppose I should give you credit for finally managing to say one thing in this thread that isn’t completely wrong and idiotic. And I’ll give you credit for finally getting close to understanding the very simple thing that I have been saying - that as the reward for working harder goes down, there will be people who will decide to opt out of it. > [@](#): > > Aaaaand here we go. First of all, Ms. My-Point-Hasn’t-Changed-One-Iota, in your original post on the subject, you made fuckall mention of raising taxes. Did you bother to read what I was responding to? > [@](#): > > Regardless, it has been pointed out to you at least a dozen times by at least a half-dozen people that, due to the marginal taxation system in this country, your “point” is mathematically impossible. I suspect your failure to grasp this point is willful. I suspect your failure to grasp the point that math has zero to do with my point is willful. > [@](#): > > Well, if nothing else, I guess you’re making people long for the days when **Starving Artist** was the God of Wrong in this thread. I disagreed with just about everything his said, but at least he’s got some intelligence, if a misguided sort. You’re just basically saying “Nuh-uh” _ad nauseum_, and throwing around “Learn to read!” (with a delicious total lack of self-awareness) like it’s the newest, most clever insult ever. And all you have done is stamp your foot and tell me I’m wrong about something that I haven’t said anything about. > [@Idle\_Thoughts](#): > > People still try to argue with Curlcoat? > > Give it up. She will always be “right” and you will always be “wrong”, no matter what you say, what cite you show, or what fact you try to give to her. Wow, it took you a long time to get to this thread! On vacation? > [@gonzomax](#): > > " There are a decent number of people who will chose not to work in the face of higher taxes." CURLCOAT actually wrote that and did not delete it in reread. Amazing. If they raise my taxes a little , I will starve, That’ll learn em. Did you learn the “win teh interwebs argument” method from **SenorBeef**? Exaggerating to the point of stupidity? ---
**Author:** ![curlcoat](https://avatars.discourse-cdn.com/v4/letter/c/ea5d25/32.png) [@curlcoat](https://boards.straightdope.com/u/curlcoat)\ **Post date:** [August 11, 2011, 1:39am UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/443 "2011-08-11T01:39:07Z")
> [@quixotic78](#): > > I’m in this exact position right now – as you say, it’s common – and _not once_ has taxes entered my mind as a factor. It just pales in comparison to all the other factors: daycare, as you mentioned; time with the kids; resulting tiredness; stress; etc.. I suspect that anyone who makes a career decision based solely – or even largely – on taxes is either (a) looking at a six-figure swing in income based on quitting that job or (b) fundamentally misunderstands how taxes work. Well, for one thing, I didn’t have a career, I had a job - I worked to make money, period. For another thing, as I said, taxes didn’t enter into the decision for me to no longer work. However, you are supporting my case here in that you might consider all of the non-financial things that would make you decide to quit working, or as **Chessic Sense** said and I have said, decide against overtime. There comes a time when the smaller reward for working harder just doesn’t cut it in the face of everything else you lose. > [@Voyager](#): > > My wife is a freelancer, and we’re in a fairly high bracket, so her income is taxed at the incremental rate. There is no point at which it does not make financial sense for her to take on additional work - sense in terms of sanity is something else. Exactly. I’ve never said that one doesn’t get to keep anything out of a raise or additional work, it’s just that as you rise up thru the tax levels, you get to keep less and less of it, to the point that it isn’t worth it to get a raise or take on additional work. One thing this brings up to me (and some will call it dodging and weaving but I don’t really care what those folks think any more) is that I failed to realize way back when I made my first post that people who are living near/at/over their income will probably be far more likely to notice any drop in income, and it seems like those kinds of people are rather common these days. Perhaps that is why some people here can’t conceive of anyone losing income and not really being hurt by it. ---
**Author:** ![quixotic78](https://avatars.discourse-cdn.com/v4/letter/q/3ab097/32.png) [@quixotic78](https://boards.straightdope.com/u/quixotic78)\ **Post date:** [August 11, 2011, 1:47am UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/444 "2011-08-11T01:47:36Z")
> [@curlcoat](#): > > And I’ll give you credit for finally getting close to understanding the very simple thing that I have been saying - that as the reward for working harder goes down, there will be people who will decide to opt out of it. Yes, it is very simple. It’s also very simple that taxes have nothing to do with it. Your perception is simply wrong. ---
**Author:** ![Chessic\_Sense](https://avatars.discourse-cdn.com/v4/letter/c/7c8e57/32.png) [@Chessic\_Sense](https://boards.straightdope.com/u/Chessic_Sense)\ **Post date:** [August 11, 2011, 2:11am UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/445 "2011-08-11T02:11:02Z")
> [@Voyager](#): > > Ummm. you’d save more than $300, since you’d also save the taxes he now pays, but you’d give up all the income he now makes. Unless his income is less than your incremental savings in taxes, you lose. I neglect the other savings from not working, of course. > > My wife is a freelancer, and we’re in a fairly high bracket, so her income is taxed at the incremental rate. There is no point at which it does not make financial sense for her to take on additional work - sense in terms of sanity is something else. It sounds like you get it, then. You recognize that there are “terms of sanity” and “financial sense” and those are competing pros and cons. When the tax rate goes up, I get less money for the same sanity sacrifice. Is it a surprise that some people are on the margin and just barely breaking even in the sanity-money trade already? For some reason, every time I bring this up, liberals retort with “You can’t make more money by quitting your job!”, as if that refuted the point at all. :rolleyes: ---
**Author:** ![Chessic\_Sense](https://avatars.discourse-cdn.com/v4/letter/c/7c8e57/32.png) [@Chessic\_Sense](https://boards.straightdope.com/u/Chessic_Sense)\ **Post date:** [August 11, 2011, 2:15am UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/446 "2011-08-11T02:15:44Z")
> [@quixotic78](#): > > I’m in this exact position right now – as you say, it’s common – and _not once_ has taxes entered my mind as a factor. It just pales in comparison to all the other factors: daycare, as you mentioned; time with the kids; resulting tiredness; stress; etc.. I suspect that anyone who makes a career decision based solely – or even largely – on taxes is either (a) looking at a six-figure swing in income based on quitting that job or (b) fundamentally misunderstands how taxes work. Wait, wait, wait. Let me get this straight. You’re saying that if a $50,000 earner considers taxes when making career choices, he _fundamentally misunderstands taxes_?! So I’m to believe that the person that thinks about taxes doesn’t understand them, but the person (like you) that doesn’t factor taxes at all understands how taxes work? That’s an interesting viewpoint. And by interesting, I mean stupid. “If you even _think_ about taxes, you fundamentally misunderstand them.” Wow. Just wow. ---
**Author:** ![Kobal2](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kobal2/32/20_2.png) [@Kobal2](https://boards.straightdope.com/u/Kobal2)\ **Post date:** [August 11, 2011, 2:32am UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/447 "2011-08-11T02:32:38Z")
> [@Chimera](#): > > The message I want to push going forward, every time I hear this, is; > > SHOW ME THE JOBS. > > Every motherfucking time they cry about how we can’t raise taxes on companies or rich people and they cry about how they are the job creators, we need to start asking where the jobs are that our previous tax cuts allegedly paid for. That’s completely unfair. Overpaid CEOs and prosperous companies certainly create a lot of jobs. In China, India… 😃 ---
**Author:** ![curlcoat](https://avatars.discourse-cdn.com/v4/letter/c/ea5d25/32.png) [@curlcoat](https://boards.straightdope.com/u/curlcoat)\ **Post date:** [August 11, 2011, 2:39am UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/448 "2011-08-11T02:39:25Z")
> [@Damuri\_Ajashi](#): > > Nope, your point was that taxes basically made you losing 20K in income a wash or close enough that you didn’t notice and you were certain that it couldn’t have been a $10K (or 50%) difference. > > In the context of the debate you were saying that taxes were so high that 20K in additional income was almost entirely consumed by those taxes. Again, I didn’t say that. And when I did show numbers, you (or someone - don’t remember now) told me I was wrong. So at this point there is no place to go with this since all you want to do is win an argument with a stranger on the internet who has zero influence on your life. > [@](#): > > No, that is not what I was suggesting. What I was suggesting was that there is assymetry of information between a mortgage broker and the average joe looking for a mortgage and that regulations may be appropriate. Uh, OK. Maybe it was the misspellings that caused me to completely misunderstand that one - still don’t understand how being against buyer beware translated into you thinking that (more) regulations on the mortgage industry may be appropriate. > [@](#): > > When I said “you gave the impression taht your income didn’t go down by an otiable amount”, I was being polite and giving you some room to back away but you insteqad you say that I was misinpterpreting your wordas? I was basically quoting your words. Do you understand the difference between a quote and a misinterpretation? Serious question here, since you seem to think quoting my posts back to me is supporting your misinterpretation of them. > [@](#): > > Not always but sometimes. And in what way is providing access to the bankrptcy courts a bailout. File for bankruptcy, pay pennies on the dollar to settle your debts, go on with life. Remember, not all bankruptcy is Chapter 7. > [@](#): > > How in the world is letting people file for bankruptcy equal to a “rush to get people out of their financial holes” The bankruptcy code has been there for a long time and it was part of the reason why LENDERS were careful about who they lent to. There have always been people willign to borrow money they could not afford, the way the credit market works is that the lender underwrite the borrowers and decide who deserves credit and who does not. For a while you had lenders convincing people that they could afford to borrrow money they cold not actually afford. OK, so “rush” was a bad word to use, but its still true that far too many people run up debt they have to know they couldn’t handle and then just make it all go away thru Chapter 13. The losses those people’s creditors took are then passed on to the rest of us. Chapter 13 filings are rising - because ambulance chasers are advertising them? I don’t know, but the consequences for being a financial idiot don’t seem to be an issue for many people anymore. > [@](#): > > This is the statement in post 68 that people latched onto I cannot speak directly to most of what followed this because you didn’t make it clear who was saying what, and I’m having enough trouble following what you are saying as it is. If you want to discuss it, you’ll need to repost it in a clearer format. > [@](#): > > That was not your original position. You psoition was not that reasonable people might work less because taxes reduced the incentive enough that they decided the juice wasn’t worth the squeeze. That is econ 101, taxes distort the economy, we know that, I would never have argued against that fact other than to say that all taxes are distortive and affect behaviour. This is NOT what you were saying. You were saying that it distorted the economy so much that losing 20K in income became barely noticable. I didn’t lose 20K in income - this is all pre-tax remember. What is unknown is how much we actually lost because I don’t have the exact figures from four years ago, but there would have been at least $5K taken out by the IRS alone, not to mention state income tax and all the other payroll taxes. I’ve been very clear that I don’t know what the exact numbers are but that we appear to be working with the same amount of money, minus some adjustments I made. > [@](#): > > Now, perhaps we all misread your statement and you were really trying to say that taxes reduce take home pay (duh) and in some cases it reduces take home pay by enough to make it not worth working, then fine but overall, your take home pay does not go down with more earned income (nor does it remain static) and that is what your posts seemed to be im[plying until people called you on it. I cannot be held responsible for what people want to read into what I post and I certainly cannot be held responsible when their first impulse is to focus on some tiny detail, that doesn’t really apply, as rudely as possible. As I said waaay back when, the only difference I know of is the amount of tax we pay, but I’ve never said I’m all knowing, all powerful - someone could easily have said “but what about X?” But in the true childish fashion of some posters in here, they went straight to Plan A. Ah well, provides an interesting insight into how some folks, er, think. ---
**Author:** ![quixotic78](https://avatars.discourse-cdn.com/v4/letter/q/3ab097/32.png) [@quixotic78](https://boards.straightdope.com/u/quixotic78)\ **Post date:** [August 11, 2011, 3:08am UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/449 "2011-08-11T03:08:26Z")
> [@Chessic\_Sense](#): > > Wait, wait, wait. Let me get this straight. You’re saying that if a $50,000 earner considers taxes when making career choices, he _fundamentally misunderstands taxes_?! > > So I’m to believe that the person that thinks about taxes doesn’t understand them, but the person (like you) that doesn’t factor taxes at all understands how taxes work? That’s an interesting viewpoint. And by interesting, I mean stupid. > > “If you even _think_ about taxes, you fundamentally misunderstand them.” Wow. Just wow. A fair point; I was too glib. To clarify, if you factor taxes into a $10,000/yr raise and figure that it won’t really be $10K, that’s so routine it’s hardly worth mentioning. However, if someone passes over a promotion because it’ll mean they’ll “get bumped into a higher tax bracket” – or, conversely, as exemplified by resident genius **curlcoat** , if you think that giving up $20K in income means you really won’t be losing anything because you’re going into a lower tax bracket – that’s a fundamental misunderstanding of how taxes work in this country. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 11, 2011, 3:19am UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/450 "2011-08-11T03:19:47Z")
> [@quixotic78](#): > > A fair point; I was too glib. To clarify, if you factor taxes into a $10,000/yr raise and figure that it won’t really be $10K, that’s so routine it’s hardly worth mentioning. However, if someone passes over a promotion because it’ll mean they’ll “get bumped into a higher tax bracket” – or, conversely, as exemplified by resident genius **curlcoat** , if you think that giving up $20K in income means you really won’t be losing anything because you’re going into a lower tax bracket – that’s a fundamental misunderstanding of how taxes work in this country. It is just silly. You do not get promoted, get a 20,000 raise and lose money. It is typical making shit up and defending that, instead of reality. ---
**Author:** ![curlcoat](https://avatars.discourse-cdn.com/v4/letter/c/ea5d25/32.png) [@curlcoat](https://boards.straightdope.com/u/curlcoat)\ **Post date:** [August 11, 2011, 5:23am UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/451 "2011-08-11T05:23:53Z")
> [@quixotic78](#): > > A fair point; I was too glib. To clarify, if you factor taxes into a $10,000/yr raise and figure that it won’t really be $10K, that’s so routine it’s hardly worth mentioning. However, if someone passes over a promotion because it’ll mean they’ll “get bumped into a higher tax bracket” – or, conversely, as exemplified by resident genius **curlcoat** , if you think that giving up $20K in income means you really won’t be losing anything because you’re going into a lower tax bracket – that’s a fundamental misunderstanding of how taxes work in this country. Well, if I were that sort of person, I’d say that you are, ahem, “evasive and excuse-laden” here, since you seem to be saying something completely different here when **Chessic Sense** called you on it. Now, if we can just work on you being able to understand I’ve been saying pretty much the same as **Chessic Sense** said in post #436, yet that is OK with you? ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 11, 2011, 1:48pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/452 "2011-08-11T13:48:29Z")
> [@perfectparanoia](#): > > If my husband were to quit his job and become a SAHD (I make more and I like my job) we would probably save about 300 dollars in taxes alone. This would be because my taxes would go down. I could claim a lot of things that we are currently unable to claim (since we make too much) and I can claim him as a dependant. > > 300 dollars is a goodly amount. It could be the make or break point for us if we were willing to give up other things (two cars, yearly vacations). > > Now, granted, I am in Canada so that probably makes a pretty big difference. Jaysus. Didn’t we just go through this with Curlcoat? ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 11, 2011, 1:52pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/453 "2011-08-11T13:52:19Z")
> [@Chessic\_Sense](#): > > Wait, wait, wait. Let me get this straight. You’re saying that if a $50,000 earner considers taxes when making career choices, he _fundamentally misunderstands taxes_?! > > So I’m to believe that the person that thinks about taxes doesn’t understand them, but the person (like you) that doesn’t factor taxes at all understands how taxes work? That’s an interesting viewpoint. And by interesting, I mean stupid. > > “If you even _think_ about taxes, you fundamentally misunderstand them.” Wow. Just wow. You seem to be reading words into quixotic’s post that are not there. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 11, 2011, 2:14pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/454 "2011-08-11T14:14:33Z")
> [@curlcoat](#): > > So at this point there is no place to go with this since all you want to do is win an argument with a stranger on the internet who has zero influence on your life. Listen, I don’t think youa re a hard core right wing nutjob. I think you have some misconceptions about taxation. Perhaps your position has refined a bit over the course of this thread (which would be great) but the notion that taxes reduce take home pay and that net pay is not as much of an incentive as gross pay was simply not your point to begin with. Even if taxes were a flat 10%, this would be true. No, your belief (which we have been trying to disabuse you of) was that taxes were so high that there wasn’t you didn’t notice quitting your 20K/year job. You started to equivocate and eventually said that you were sure taht teh difference wasn’t $10K. Well I popinted out that you didn’t even have a 50% tax rate, bnever mind a 100% tax rate. > [@](#): > > Do you understand the difference between a quote and a misinterpretation? Serious question here, since you seem to think quoting my posts back to me is supporting your misinterpretation of them. Unless you are using a special language where your words mean something different than what they mean to the rest of us. If you have changed your position or if you overstated your position to begin with, then fine but your original statements indicated that you were being taxed at a rate of at least 50%. > [@](#): > > File for bankruptcy, pay pennies on the dollar to settle your debts, go on with life. Remember, not all bankruptcy is Chapter 7. And how is Chapter 13 a bailout? Chapter 13 has been part of the bankruptcy code since its inception. > [@](#): > > OK, so “rush” was a bad word to use, but its still true that far too many people run up debt they have to know they couldn’t handle and then just make it all go away thru Chapter 13. The losses those people’s creditors took are then passed on to the rest of us. Chapter 13 filings are rising - because ambulance chasers are advertising them? I don’t know, but the consequences for being a financial idiot don’t seem to be an issue for many people anymore. I guess I was offended by your insinuation that we were rushing to bail out financially irresponsible people. The thing is, there have ALWAYS been financially irresponsible people and the thing that prevented them from brorowing more money than they could afford to repay has ALWAYS been the folks who were lending the money and wanted to get repaid. This broke down and lenders started lending money to anyone who could fog a mirror, and then they actively started selling mortgages to people who had paid off their homes (cash out refinancing). The consequences of a bankruptcy are fairly severe. It remains on your credit report for 10 years, this influences your ability to buy a home, start a business, get a JOB, and you don’t make it ALL go away under Chapter 13. Chapter 13 is a form of debt consolidation and rehabilitaion, not debt relief, you have to get court approval to take out new credit during teh rehabilitation period. And to be fair the 2005 Bankruptcy law makes it hard to obtain debt relief in nay form if you make more than the median income in your state. > [@](#): > > I didn’t lose 20K in income - this is all pre-tax remember. What is unknown is how much we actually lost because I don’t have the exact figures from four years ago, but there would have been at least $5K taken out by the IRS alone, not to mention state income tax and all the other payroll taxes. I’ve been very clear that I don’t know what the exact numbers are but that we appear to be working with the same amount of money, minus some adjustments I made. You seemed to be attributing it all to taxes. > [@](#): > > I cannot be held responsible for what people want to read into what I post and I certainly cannot be held responsible when their first impulse is to focus on some tiny detail, that doesn’t really apply, as rudely as possible. As I said waaay back when, the only difference I know of is the amount of tax we pay, but I’ve never said I’m all knowing, all powerful - someone could easily have said “but what about X?” But in the true childish fashion of some posters in here, they went straight to Plan A. Ah well, provides an interesting insight into how some folks, er, think. A group of people didn’t all imagine what you said. It wasn’t earthshatteringly offensive, it just seemed to be contrary to the rules of math. If you were in fact saying nothing then fine but you made an observation that most reasonble people would say was linking taxes to no noticable difference from a drop of $20K in your income. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 11, 2011, 2:17pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/455 "2011-08-11T14:17:41Z")
> [@quixotic78](#): > > A fair point; I was too glib. To clarify, if you factor taxes into a $10,000/yr raise and figure that it won’t really be $10K, that’s so routine it’s hardly worth mentioning. However, if someone passes over a promotion because it’ll mean they’ll “get bumped into a higher tax bracket” – or, conversely, as exemplified by resident genius **curlcoat** , if you think that giving up $20K in income means you really won’t be losing anything because you’re going into a lower tax bracket – that’s a fundamental misunderstanding of how taxes work in this country. To be fair, I think she understands the concept of marginal tax rates, its just that she has a misperception of how high her marginal tax rate is. Her federal marginal tax rate seems to be 25%, and somehow she thinks that all these other taxes are high enough to bump that up to a level where she doesn’t really notice the income hit from losing 20K in income. She explicitly said she thought it had to be more than 50% because she would notice a 10K difference. ---
**Author:** ![Enderw24](https://avatars.discourse-cdn.com/v4/letter/e/ba9def/32.png) [@Enderw24](https://boards.straightdope.com/u/Enderw24)\ **Post date:** [August 11, 2011, 2:38pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/456 "2011-08-11T14:38:13Z")
> [@Chessic\_Sense](#): > > Wait, wait, wait. Let me get this straight. You’re saying that if a $50,000 earner considers taxes when making career choices, he _fundamentally misunderstands taxes_?! Probably. Let’s take a single guy who’s earning $34,500 per year working a straight 40 hour week. He’s at the top of the IRS’s 15% tax bracket so he’s paying $5,175 in taxes taking home $14.10 per hour or $29,325 per year. Yes, we’re ignoring everything but federal for purposes of this hypothetical. So his boss comes to him and said “Schmedley, you’re doing a bang up job! I want to offer you a promotion! You’ll get $50,000 but you’ll have to work 50 hours a week.” So Schmedley goes home and does some calculations. First, that extra money bumps him into the 25% tax bracket. But only for the last $15,500 so he’ll be paying an additional $3,875 on that money. Sucks, right? But he’ll be taking home $40,950 or an effective raise of $11,625. Of course he’ll be working 2,600 hours a year and that means his hourly pay is $15.75. Sure, if he’d have remained in the 15% tax bracket while still getting that raise, he’d have gotten to take home an additional $1,550. So taxes definitely play a factor. But at the end of the day, no matter how you slice it, he’s still taking home more than he did before. So taxes absolutely can factor into your calculations…but they’re NOT going to factor into your decision. Why? Because the bigger variable is that 50 hours per week. THAT is what Schmedley’s making his decision on. Is it worth giving up an additional 520 hours a year for that amount of money? If the boss said “Schmedley, here’s a raise. Keep on truckin’!” this would be a no brainer, right? You wouldn’t even look at the tax implications. You’d just say “thank you” and go on with your day. So I ask you. Give me a scenario where taxes enter not into your calculations, but as a significant factor in your decision? ---
**Author:** ![perfectparanoia](https://avatars.discourse-cdn.com/v4/letter/p/a5b964/32.png) [@perfectparanoia](https://boards.straightdope.com/u/perfectparanoia)\ **Post date:** [August 11, 2011, 3:30pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/457 "2011-08-11T15:30:22Z")
> [@SenorBeef](#): > > And this $300 (are we talking per paycheck? Per year? What?) is more than he makes? > > Whatever you’re talking about, it isn’t the marginal tax rate on income tax. 300 a month. It would be a factor for us. It has nothing to do with the changes in his taxes (which would go to zero) but has to do with being able to claim additional things against my income. We would still be out his entire salary though. (And it certainly has nothing whatsoever to do with marginal tax rates which I was educated on when I jumped tax brackets in my second year of employment.) Can you people not claim additional deductions if one of you is not working and/or your income is reduced? Things like heating costs, dependants. Maybe our tax system is very different here. ---
**Author:** ![quixotic78](https://avatars.discourse-cdn.com/v4/letter/q/3ab097/32.png) [@quixotic78](https://boards.straightdope.com/u/quixotic78)\ **Post date:** [August 11, 2011, 4:36pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/458 "2011-08-11T16:36:47Z")
> [@curlcoat](#): > > Well, if I were that sort of person, I’d say that you are, ahem, “evasive and excuse-laden” here You could say that. It’d be totally wrong and idiotic, but you could say it. I wasn’t evading or making any excuses whatsoever; I was admitting that I did not communicate effectively. I was glib. I misspoke. I was imprecise with my words. The fault is entirely mine. These are all the _opposite_ of an excuse. > [@](#): > > Now, if we can just work on you being able to understand I’ve been saying pretty much the same as **Chessic Sense** said in post #436, yet that is OK with you? This is just patently absurd and obviously false. You’re not just moving the goalposts; you’re changing the game from football to tiddlywinks. **Chessic Sense** highlighted differences in daycare, gas, and effort, and said that taxes could _influence_ a decision to quit a job. **In contrast** , you said (emphasis added) > [@](#): > > **Due to the difference in the amount of income tax we pay (which does include state income tax)**, we have noticed almost no difference. I’ve made some adjustments, but really our lifestyle hasn’t changed that much, and $20K is (to me anyway) a lot of money. You didn’t say “Due to differences in daycare, gas, not buying that $3 breakfast burrito on the way to work every day, the disability check I now collect every month, minor modifications in our spending habits, and taxes, we haven’t noticed much of a difference.” Nope, you said “ **Due to the difference in the amount of income tax we pay**.” One wonders, if you’re not noticing a decrease in $20,000 annual income, why you don’t tell your husband to reduce his commitment enough to drop you another $20,000. After all, you’re not _losing_ anything – those rapacious taxes take nearly all of that 20K anyways – and he’d be gaining extra free time. So you should tell him not to work Fridays anymore, right? ---
**Author:** ![Chessic\_Sense](https://avatars.discourse-cdn.com/v4/letter/c/7c8e57/32.png) [@Chessic\_Sense](https://boards.straightdope.com/u/Chessic_Sense)\ **Post date:** [August 11, 2011, 4:47pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/459 "2011-08-11T16:47:27Z")
> [@Enderw24](#): > > So I ask you. Give me a scenario where taxes enter not into your calculations, but as a significant factor in your decision? I don’t see how you can say that a 25% cut from pre-tax to post-tax is insignficant, but let me dress it up a little and we’ll see if I can get you to say it’s significant: Your boss says that since you’re such a good employee, he wants to promote you to Sara’s position when she retires next month. The new gig comes with the corporate car, so that’s cool, and you can even telecommute on Fridays. Not to mention, you’ll be boss…and that’s badass all on its own. But if you don’t want the job, he understands. It’s a lot of work. But hey, he’s tired of their competitor poaching all his good workers, and he wants to keep you on board and happy, so if you don’t take the promotion, he’ll give you an extra $15,000 on your salary after your next annual review which is coming up shortly. Oh, and he wants your decision by Monday. So you head home for the weekend with two options: Cool job with benefits or $15,000. You think it all out and figure that you value the benefits at roughly $12,000 a year. Which one should you take? Now I haven’t told you what your current salary, and thus tax rate, is. But hey, if it’s insignificant, then I shouldn’t have to tell you, right? Or do you think you oughta find it out and work out the math on a napkin before telling your boss your decision? I could make up these scenarios all day involving variables like longer commutes, opportunities to meet celebrities, travel perks, staying home with the kids, picking up new skills, earning/losing seniority, employer-paid health care, stress level, and so on. All of those things are untaxed and yet should be counted as “compensation” from a job. Your salary, however, is taxed. So yes, you should factor in taxes before making any job-changing decisions as it’ll cut that 1 raise into an effective .70 raise. ---
**Author:** ![quixotic78](https://avatars.discourse-cdn.com/v4/letter/q/3ab097/32.png) [@quixotic78](https://boards.straightdope.com/u/quixotic78)\ **Post date:** [August 11, 2011, 4:54pm UTC](https://boards.straightdope.com/t/taxing-the-rich/590209/460 "2011-08-11T16:54:30Z")
> [@Chessic\_Sense](#): > > Now I haven’t told you what your current salary, and thus tax rate, is. But hey, if it’s insignificant, then I shouldn’t have to tell you, right? Or do you think you oughta find it out and work out the math on a napkin before telling your boss your decision? Current salary is less important than knowing how much more Sara’s position pays than my current one; you also haven’t indicated how much more work it’ll require. If it’s $250,000/yr more and not much more effort, the tax rate could be double what it is now and I’d take it. If it’s $1,000/yr more and twice the effort, the tax rate could be 2% and I wouldn’t take it. Care to add these details – you can leave out current salary, if you’d like – or are you content to make your situation a riddle simply by artificially leaving out information? [Previous page](https://boards.straightdope.com/t/taxing-the-rich/590209.md?page=22) [Next page](https://boards.straightdope.com/t/taxing-the-rich/590209.md?page=24)