Re:Just Be Rich
by arkh on Tuesday April 13, 2021 @06:31AM
(#26790389)
It reads like you think progressive taxation is not bracketed. Which is something often found with people from poor background.
Let's say you have some system where your taxed 0% for income < $20k, 10% between $20k and $40k and 30% for $40k+. You currently earn $39k. You have to pay 10% of $19k so $1900, you keep $37.1k after tax. You're offered a $2k raise. Lot of poor people think that you'll suddenly have to pay 30% * $41k so $12k and lose money. But the 30% is only applied to the portion of revenue you get over $40k. With your raise you know have to pay 10% of $20k + 30% of $1k so $2.3k so you keep $38.7k after taxes, so your raise end up being $1.6k. You have not lost anything.
Now the problem comes from social benefits which usually are not regressive and work on a all or nothing system.
Re:Just Be Rich
by varispeed on Tuesday April 13, 2021 @09:14AM
(#26791713)
The problem is when you get a good job that pays $100k or more. You are not rich, but you are targeted by a tax supposedly for the rich (which they don't pay as they have means to avoid it).
Let's say you have some system where your taxed 0% for income < $20k, 10% between $20k and $40k and 30% for $40k+. You currently earn $39k. You have to pay 10% of $19k so $1900, you keep $37.1k after tax. You're offered a $2k raise. Lot of poor people think that you'll suddenly have to pay 30% * $41k so $12k and lose money. But the 30% is only applied to the portion of revenue you get over $40k. With your raise you know have to pay 10% of $20k + 30% of $1k so $2.3k so you keep $38.7k after taxes, so your raise end up being $1.6k. You have not lost anything.
Now the problem comes from social benefits which usually are not regressive and work on a all or nothing system.