America the Beautiful wrote:
>
>
> mrtravel wrote:
>
>> Greg Procter wrote:
>>
>> \
>>
>>>
>>>
>>> One of us is!
>>> So far you've told me that people receiving lest than a certain income
>>> pay no income tax and that people earning more than that sum pay tax on
>>> all their income.
>>>
>>> On that basis let's take a ficticious example. Say the dividing line was
>>> $10,000- and income tax was 10%
>>>
>>> Person A is earning $9,999- pa. His take home pay would be $9,999- and
>>> the Tax Department take would be $0-
>>> Person B is earning $10,001- pa. His take home pay would be $9,000.90
>>> and the Tax Department take would be $1,000.10
>>
>>
>>
>> You seem to not understand how a progressive tax rate works, even
>> after I have described it to you earlier.
>>
>> The 10 percent would not be charge be all of the income, just the part
>> of the income over 10000.
>>
>> Person A would take home 9999
>> Person B would take home 10001 less 10 percent of the amount over 10000.
>> So, only $1 in income would be subject to the 10 percent tax, and he
>> would net $10000.90 after the tax.
>
>
> That is absolutely correct. Many people worry about working too much as
> they will be brought into a higher tax bracket which will lower their
> take-home pay. But they fail to realize that only the extra money is
> brought into the higher bracket. So working extra overtime will ALWAYS
> increase your take-home.
>
I guess this is why Proctor is still confused after multiple
explanations with examples. And EIC works in a similar way, sort of
like negative tax brackets. |