This is the funniest thing I’ve read in a while, and I’ve read some downright hilarious right-wing economic arguments in the last couple of weeks.
President Barack Obama’s tax proposal – which promises to increase taxes for those families with incomes of $250,000 or more — has some Americans brainstorming ways to decrease their pay, even if it’s just by a dollar.
An ABC.com reporter who doesn’t understand how income taxes work finds rich people who don’t know either and makes a story out of it.
A tax hike on incomes over $250,000 would only apply to the amount of a person’s income that exceeds $250,000. Thus, if the rate of income tax on income over $250,000 is raised from 34% to 39% (as proposed by Obama, restoring the rates in effect during the 1990s), the 39% percent rate only applies to income over $250,000, not the income up to $250,000. Lowering your income below $250,000 doesn’t net you more money — you’d still get to keep 61 cents of every dollar you make over $250,000. Every extra dollar you make adds to your income, no matter what your tax bracket. It’s elementary school math.