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"Getting paid more money is for fools"
(lemmy.ml)
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this post was submitted on 20 Jun 2024
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At least in the US there is no possible situation where you'd get less money for making more money.
Exactly, or that's how it was explained to me. Say you get a 10k raise from 94k to 104k and the next bracket is at 100k. If your old percent was 20% and the 100k bracket is 25% only the "extra" 4k would be taxed at 25% and the 6k before that would be 20%.
Or so I've been told by smarter people than me. Numbers/ brackets and percentages are all made up to make it easier.
Midwest, US if it matters.
I don't believe that's actually true. I think in the USA there are a few programs that have a hard cap on income to disqualify you. Food and housing assistance related things. I'm not American so I'm not 100% sure on them but I do think there are some scenarios
That's true. You'll still be making more money, but you'll also have more expenses. This doesn't apply to most people though, and for sure not ones getting a $10k raise. The progressive tax system we have only applies the tax as you progress through the levels. The first $10k will be taxed at one level, then the next bracket, then the next, etc. It's not done as one lump tax.
Different programs should be set up to slowly decrease how much you get instead of cutoff amounts. That'd remove that issue. Obviously some things are either on or off so they can't be done this way though. Ideally a lot of it should just be provided to everyone no matter what though.
Oh yeah. That's absolutely the case for disability I believe. If you start to make a certain amount they just take away benefits. And the amount you have to make to lose benefits it's actually less money than what the benefits themselves are.
I know people personally who are affected by that situation.
Very good thing to point out and wasn't something I was thinking about. Thank you.
I guess it would be more accurate to say your paycheck from your job will never be less money due to making more money.
I'm sure there are cases but that's effectively a $4.80 / hour raise at full time, you'd need a lot of dependants or other assistance programs to make that not worth it if you're already working full time.
Never say never. There are hard income limits for certain tax credits, like EV tax credits, and some weird COVID relief funds for dependents that actually do result in situations where you get less money for making more money. Also things like ability to fund a Roth IRA. I know because it has happened to me. Even following the tax table results in some situations where you can make a few bucks less by earning more, as someone pointed out above. Other folks have pointed out other benefits cliffs and higher education shenanigans. But you're generally right.