Skip to main content

Road sign:
Via Kevin Roose, meet the business owner who is so afraid of (and clueless about) marginal tax brackets that she thinks she'd be better off earning less money than entering the top marginal income bracket:
Kristina Collins, a chiropractor in McLean, Va., said she and her husband planned to closely monitor the business income from their joint practice to avoid crossing the income threshold for higher taxes outlined by President Obama on earnings above $200,000 for individuals and $250,000 for couples.

Ms. Collins said she felt torn by being near the cutoff line and disappointed that federal tax policy was providing a disincentive to keep expanding a business she founded in 1998.

“If we’re really close and it’s near the end-year, maybe we’ll just close down for a while and go on vacation,” she said.

The thing that this chiropractor doesn't seem to understand is that the top marginal tax rate only applies to income earned in excess of $250,000 (or $200,000 for single filers). Under President Obama's plan, the top marginal tax rate will go up by 4.6 percent. That means if she and her husband earn $350,000 in taxable income, their taxes would be $4,600 higher under Obama's plan than under current policy. The only thing that gets taxed at a higher rate is the $100,000 in taxable income they earn above $250,000.

The point is, they'd still better off making more money. There's absolutely no advantage whatsoever to forgoing income. This is not exactly rocket science, but it's a shockingly widespread misconception. Last year, USA Today printed an op-ed devoted to promulgating the terrible advice that you should reject a raise that pushes you into a new marginal tax bracket, requesting something non-financial, such as a new parking space instead of more cash.

The most pathetic part of this story is that this chiropractor probably actually isn't even going to hit the tax bracket anyway, yet is filled with baseless fear of what would happen if she did. (It reminds me of Joe the Plumber, who was worried about what would happen if his imaginary plumbing company ever made more than a quarter million in profits.)

So this isn't just clueless, it's irrelevant. It's an imaginary problem, twice over. And it's exactly the sort of thinking that gives the GOP its political base.

Originally posted to The Jed Report on Mon Nov 19, 2012 at 03:18 PM PST.

Also republished by Daily Kos.

Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags


More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

kos, skybluewater, Joe Bob, RF, Bill in Portland Maine, Chi, True North, grollen, glitterscale, Rolfyboy6, lost, PeterHug, TechBob, donna in evanston, hyperstation, LynnS, celdd, eeff, xynz, Bryce in Seattle, exNYinTX, bookbear, hubcap, ssgbryan, rasbobbo, missLotus, 88kathy, Silverleaf, magnetics, SamSinister, lippythelion69, ask, CoolOnion, highacidity, mkfarkus, mrblifil, Kerry Conservative, chimpy, retLT, CodeTalker, Iberian, splashy, aitchdee, revsue, Texknight, SneakySnu, hopesprings, Getreal1246, psnyder, NYC Sophia, Farugia, Dr Colossus, figbash, pat bunny, potatohead, Hawksana, texasmom, raster44, rlharry, lcrp, Brian82, Sophie Amrain, barbwires, outragedinSF, zdefender, zerelda, Curt Matlock, randallt, KayCeSF, tomjones, Wife of Bath, lyvwyr101, Armand451, Dirk McQuigley, A Citizen, maybeeso in michigan, marina, Treg, DianeNYS, democracy inaction, tolerant, Alice Venturi, kitchen sink think tank, stagemom, Brooke In Seattle, YucatanMan, Dobber, Kevskos, SaraBeth, Kayakbiker, Overseas, skyounkin, jane123, sunbro, Cecile, Tool, minidriver, Shotput8, Pluto, Alan Arizona, begone, reddbierd, Shirl In Idaho, Nance, Sanuk, gwilson, snazzzybird, lonemorriscodem, tommymet, flying shams, BlueInARedState, emeraldmaiden, AoT, fou, raincrow, blueoasis, StrayCat, bubbanomics, JVolvo, unclebucky, CTLiberal, myrealname, ER Doc, Pilgrim X, Clive all hat no horse Rodeo, Texdude50, ipsos, Aaa T Tudeattack, Thinking Fella, fiver, One Pissed Off Liberal, phonegery, bluicebank, Cronesense, SomeStones, Habitat Vic, rchipevans, Cat Whisperer, Loudoun County Dem, tgypsy, camlbacker, gloriana, DvCM, gustynpip, nookular, bnasley, rantsposition, HCKAD, letsgetreal, millwood, OIL GUY, Wreck Smurfy, uciguy30, GeorgeXVIII, leonard145b, fallina7, edbb, skod, aseth, TomP, TruthFreedomKindness, misterwade, Argyrios, TX Freethinker, wayoutinthestix, Johnny Nucleo, Sixty Something, Foundmyvoice, Involuntary Exile, elwior, lineatus, KJG52, Its any one guess, jamess, TomFromNJ, tofumagoo, Cassandra Waites, mofembot, Gemina13, petulans, mattc129, emidesu, HarpboyAK, magicsister, Robobagpiper, statsone, LaFeminista, Bule Betawi, Ran3dy, Ripeness Is All, Throw The Bums Out, DontTaseMeBro, Glacial Erratic, greengemini, not a cent, fearisthemindkiller, tari, shalca, virginwoolf, manucpa, johnosahon, Shelley99, sfarkash, astral66, AkaEnragedGoddess, Larsstephens, ruscle, Just Bob, Its the Supreme Court Stupid, brooklyns finest, coppercelt, confitesprit, catwho, piers, eb23, Lost and Found, gosoxataboy, manyamile, pixxer, ItsSimpleSimon, anonevent, DiegoUK, asm121, ericlewis0, Oh Mary Oh, soaglow, JanG, slice, JenniferInOK, Onomastic, Mike08, the dogs sockpuppet, Jasel, Front Toward Enemy, Bluefin, mama jo, bluebuckaroo, slowbutsure, Wolf Of Aquarius, ardyess, Mistral Wind, asterkitty, OhioNatureMom, Mr Raymond Luxury Yacht, Nicci August, deeproots, page394, armd, molunkusmol, mrsgoo, marleycat, zukesgirl64, thomask, Yogurt721, SueM1121, RMForbes, poliwrangler, VTCC73, Deathtongue, Vatexia, ratcityreprobate, SteelerGrrl, blackjackal, Mentatmark, Rashaverak, caryltoo, ChiTownDenny, allergywoman, livingthedream, stormicats, anodnhajo, Siri, MikeyB33, IndieGuy, ahumbleopinion, a2nite, FloridaSNMOM, Trotskyrepublican, FreeSpeaker, mapamp, jan4insight, radical simplicity, Arahahex, Buckeye54, lunachickie, Margd, cassandracarolina, james321, avsp, GAladybug, deconite, Robynhood too, KingTag, TheLawnRanger, Lily O Lady, MishaBrewer, desert rain, Dr Erich Bloodaxe RN, remembrance, SanFernandoValleyMom, angry artist, minnec, aresea, helpImdrowning, LaraJones, Icicle68, MiyukiMiyazaki, nice marmot, ET3117, tampaedski, JustGiaco, richardvjohnson, Blackhawks, Ticorules

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site