If You Make More Money, You’ll Make More Money

A lot of people misunderstand the way our tax system works.

If the tax rate for income over $250,000 increases, that rate only applies to income over $250,000. The rate on the first $250,000 is unchanged. If you make $250,001 and the high end rate increases, you only pay the increased rate on $1.

If you ever hear someone saying that they want to turn down a raise (or turn away customers, or whatever) in order to keep their income in a lower tax bracket because their increased tax bill would be larger than their raise, please refer them to me. I have some things I’d like to sell them.

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