109
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
this post was submitted on 20 Jan 2024
109 points (93.6% liked)
Work Reform
9857 readers
541 users here now
A place to discuss positive changes that can make work more equitable, and to vent about current practices. We are NOT against work; we just want the fruits of our labor to be recognized better.
Our Philosophies:
- All workers must be paid a living wage for their labor.
- Income inequality is the main cause of lower living standards.
- Workers must join together and fight back for what is rightfully theirs.
- We must not be divided and conquered. Workers gain the most when they focus on unifying issues.
Our Goals
- Higher wages for underpaid workers.
- Better worker representation, including but not limited to unions.
- Better and fewer working hours.
- Stimulating a massive wave of worker organizing in the United States and beyond.
- Organizing and supporting political causes and campaigns that put workers first.
founded 1 year ago
MODERATORS
I'm unclear on how a tax rate of, say, 30% can eat 100% of some non-zero value.
Like, if you went from Gross: 1000, net 700 to gross 1100, you're going to go to 770.
If income above 1000 is taxed at a higher rate of like 50%, you'd still keep half of the new 100 on top of whatever you were paying before for the bottom 1000.
Wait I think I figured out how people think it works. If you don't understand tax brackets and think that your entire income is taxed at the new rate, there are some cases that could a net loss. That's not how taxes work anywhere in the US to my knowledge.
Let's say you have a gross income of 10,000 because that's a nice round number. And you pay 10% of that in cases, because that's also a nice round number. Your net take home is $9000.
Let's say you then get a huge pay raise to 20,000. And in this incorrect model of taxation, that puts you in a new tax bracket of 70%. You would then take home 20,000 * .3 = $6000, which is less than your net was with a base of 10,000.
But, again, that's not how tax brackets work so far as I'm aware anywhere in the US.
What would actually happen is the first 10,000 would be taxed at its rate. 10% in this case. You'd pay that $1000. If the next bracket went from 10,001 to 20000 and was at 70%, you'd pay 7000 of that chunk. So your net take home would be 9000 + 3000 = $12,000, which is definitely more than the $9000 you took home with a gross of 10k. Except the real numbers are different, filing status matters, and there's different incomes and investments that complicate things. Here are some numbers: https://www.nerdwallet.com/article/taxes/federal-income-tax-brackets
Progressive taxation should be taught everywhere if it's not. I think I learned it in like 10th grade, but i'm old and my memory is foggy.
There is one instance in the US where you can lose money from a raise. You can deduct 100% of student loan interest as an "above the line" deduction (not an itemized deduction) unless you make more than $72,000 a year, and then you can deduct none of it.
Some people pay thousands of dollars in student loan interest a year. A $1 per year raise could put them over the line and cost them whatever the marginal tax rate is on those thousands of dollars.
It's a stupid cliff of a line. It should be a curve.