Quote:
Originally Posted by RickFLM4
1. It was literally suggested by someone a few posts back.
2. At some point making less of each extra dollar isn't worth it. Would it be worth it to make that extra dollar if you were taxed 99% on it? Of course not. Everyone has a point where making a smaller % of each incremental dollar isn't worth it.
Making more and keeping less of the incremental amount still leaves you with more, but the effort to make the incremental portion you keep isn't always worth it.
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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."