[Cshelton]

The point that the businessman was trying to make is not that he misunderstands how marginal tax rates work, but for the next dollar I'm going to earn, I now get to keep less. My incentive to earn the NEXT dollar is therefore less.

This is exactly why we don't have a tax rate on the top bracket of 90% like in the Eisenhower era. It's not about being taxed on all your money when you make over that amount, it is, where is the incentive to grow my self or my company if I only get to keep $0.10 of the next dollar I make.

Most people who pay multiple tax rates across brackets understand how it works.

[weaksauce]

Listen, I saw it and I know what he said. he said if he goes one dollar over 250k he would make less than if he had not gone over that threshold. this is complete bullshit and it was either an ignorant understanding of marginal tax rates or a deliberate way to obfuscate the issue with a national tv appearance where you can feign ignorance and most of the population doesn't understand tax rates.

He didn't say after 250k my motivation to work is gone because a smaller amount is returned to me.(iirc the tax rate wasn't that much more than it was before anyway) he said he would lose money if he went over that threshold of 250k.

[djrogers]

> he said if he goes one dollar over 250k he would make less than if he had not gone over that threshold.

That actually is theoretically possible - there are numerous tax credits and deductions that come with income caps, and while they are generally phased out, it's not always a smooth slope, and can have some cliffs.

Obviously he'd be in a very odd and like one-time situation if that were the case, but it is possible with how screwy our tax system is.

[weaksauce]

> Obviously he'd be in a very odd and like one-time situation if that were the case, but it is possible with how screwy our tax system is.

That scenario is possible, sure. either way it's disingenuous to make the claim that they would lose money by making one more dollar when the tax breaks were not part of the discussion and that cliff would exist regardless of the marginal tax rate on the high earners(which they were discussing). I am ALL for simplifying the tax code to remove subsidies and loopholes and other complexities to the tax code. I am not for removing the progressive nature of the tax code.