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Oh, Really?
Mar. 9th, 2009 12:28 pmI've stated before that I think the libertarian threat to "go John Galt" (reduce income or quit working) is a crock. What's driving the current fad is the proposal to raise income tax rates on income above $250,000 from 36% to 39.5%. The Galt-ites are saying "it's just not worth the effort to work" at that tax rate.
So I did the numbers.
Assume you are making $250,000 in taxable income, and have an option to increase that income to $270,000, a difference of $20,000.
Current taxes on additional $20,000 = 20,000 x .36 = $7,200, net income $12,800
Proposed taxes on additional $20,000 = 20,000 x .395 = $7,900, net income $12,100
Difference current vs. proposed = $700
Do you really want to tell me you'd pass up $20,000 of gross income to save $700? Or that you couldn't find something useful to do with an additional $12,100?
So I did the numbers.
Assume you are making $250,000 in taxable income, and have an option to increase that income to $270,000, a difference of $20,000.
Current taxes on additional $20,000 = 20,000 x .36 = $7,200, net income $12,800
Proposed taxes on additional $20,000 = 20,000 x .395 = $7,900, net income $12,100
Difference current vs. proposed = $700
Do you really want to tell me you'd pass up $20,000 of gross income to save $700? Or that you couldn't find something useful to do with an additional $12,100?
