Quote:
Originally Posted by Titan
It doesn't really apply to people who make big money already. If you make 750k u are in the top 1% already. Its for people who make an average salary of say 45k a year and are looking to go up. Any money you make above that amount has a very steep tax rate. Why work harder when the government will just take 40% of any extra money you make when you can be lazy and only get taxed 10%?
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Because it is a tiered tax system and doesnt jump from 10 to 40%. For simplicity sake we'll use real basic numbers. Say you make $50k and 0-$25k is taxed at 10% and $26k to $50k is taxed at 20%. So far you've paid $7500 in taxes. If the next $25k ($51k to $75k) of earnings rises to 30% instead of the 20% the $26k to $50k in earnings were taxed you're paying an additional $2500 in tax ($7500 versus $5000).
So if someone decides there not going to work anymore (but have the ability and time) to make $25k more in earnings and pocket an additional $17500 after tax just because the tax rate went up an additional 10% for that tier they're either an idiot or lazy.
A tiered system might not be fair but to use it as an excuse to not work is ridiculous.