Wednesday, November 21, 2012

Marginal Tax Rate


For John, BLUFLimiting your earnings to avoid higher taxes just limits your income.  You save nothing.

Professor Paul Caron, at the Tax Law Blog tells us that The New York Times got it wrong in explaining marginal tax rates.

Here is the strait 'gen.  The way Federal Income Taxes work is that the higher rate only applies to the money you earn above and beyond the money you earn in the lower bracket.

You only hurt yourself by limiting your income to avoid paying extra taxes.

Even Newsreader Rachel Maddow makes the point, at the previous link.  And shows that this is not a new mistaken idea.

Innumeracy!

Earn more, hire more, enjoy life, contribute to the economy.

Regards  —  Cliff

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