current system is graduated. You only pay additional tax on monies over the amount. so everyone pays the no tax on a certain amount then a small tax on another amount then higher then higher. If you are in the highest tax bracket you do not pay that percentage on all the money you make only on money above that highes bracket. the real problem is our bracket is just after cresting 100k or so for individuals and there are no further brackets for like millions or such.
this post was submitted on 02 Mar 2025
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Yeah. I personally think that a mathematical curve would address that.
yeah or they could just add more brackets. there is nothing to really fix method wise but as long as the effect is the same I would not care much.
Let’s be super clear: you cannot get a raise that functionally makes it so you make less a year unless you depend on means tested benefits, which is a separate problem driven by a different mechanism. The former is a myth that lower/middle income earning (usually conservatives) parrot because they don’t understand tax brackets and it’s a common, inaccurate political talking point.
You cannot have lower take home pay because you got a raise. You can lose benefits which functionally reduces your household budget but it’s not the same thing and the reason that happens has nothing to do with how taxes are structured.
TL;DR: getting a raise is never a bad thing for your take home income ever at all for any reason whatsoever.
One of the benefits off of the top of my head, is that people wouldn’t be scared of their salary increasing just enough, to actually lower their clean income.
Why wouldn't they? This isn't how it works now, but people are still scared of it.
To be clear, the first three tax brackets are at $11600, $47150, and $100526 (for a single filer), at 10%, 12% and 22% respectively. If you make $58000, the first $11600 is taxed at 10%, the next $35550 is taxed at 12%, and the remaining $10850 is taxed at 22%. (This is the exact example the IRS gives.) If you go from making $47k (the top of which falls in the 12% bracket) to $48k (the top of which falls in the 22% bracket), you're still making more money. That last $850 is just taxed at a higher rate.
Thanks for the explanation, but keep in mind that this is not only about the US. I am Portuguese, and this is a problem here, AFAIK. Nonetheless, this would simplify the tax calculation.
You obviously know better than I do, so take this with a grain of salt, but I was curious, and a quick google search turned up this source, which says:
Let’s say you are a tax resident in Portugal, and your gross annual income for 2022 is €30,000. To calculate your income tax liability for the year, you would follow these steps:
Determine your tax bracket: Your €30,000 falls into the 35% tax bracket. Calculate the tax owed on the portion of your income in that bracket: The portion in the 35% bracket is €9,678 (€30,000 – €20,322). To calculate the tax owed on this portion, you would multiply it by the tax rate of 35%, which gives you €3,384.30. Calculate the tax owed on the portion of your income in the lower tax brackets: The portion of your income in the lower tax brackets is €20,322 (€30,000 – €9,678). To calculate the tax owed on this portion, you would add up the tax owed at each lower tax rate. That gives you:
€1,033.80 for the portion of your income in the 14.5% bracket €1,259.96 for the portion of your income in the 23% bracket €2,901.30 for the portion of your income in the 28.5% bracket
Adding these amounts together gives you a total of €5,195.06.
Hmm, you are right. But this is not knowledge that is taught to us. So, the main problem is politicians limiting the information given, no?
It's not taught to us (in the US), either; in my opinion, this is the sort of thing that should be covered in the last year of primary school. There's so many general things you need to know to function in society as an adult that we're just expected to learn on our own.
Yeah. The little amount of financial literacy that I have, I got from experience; it was never taught to me by the school system.
The salary incr asking fear is the most successful psyop by big companies ever. It just doesn't work like that
I don't know about an exponential curve but I do think a mathematical formula could be nice to prevent politicians from tweaking the brackets. I don't think this gets rid of any sort of irrational fear that people have about earning more yet coming out worse because of increased taxation.