When the government’s tax regime is so oppressive, and there are so many governmental incentives not to excel, but to remain mediocre, what is a middle class person to do? Shrug.
From Forbes, H/T Instapundit.
Middle-class folks are finding that a raise or second paycheck doesn’t always mean living better. Time to work less?
Judith Lederman would like to find another $120,000-a-year job. But Casey, her high school senior daughter, will qualify for $19,000 a year more in college financial aid if mom has to settle for half that salary.
Eighteen months after being laid off, Judith Lederman, a 50-year-old divorcee who lives in Scarsdale, N.Y., is ready to consider jobs paying half the $120,000 she earned as a publicity manager at Lord & Taylor. That’s mostly because she’s desperate, but it also makes sense when you consider how this country punishes work effort. While the first $60,000 of her income would be lightly taxed, the next $60,000 would be hit with what is in effect a 79% tax rate. Given a choice between a part-time or easy job paying $60,000 and a demanding, stress-ridden job paying $120,000, Lederman would be wise to take the former. In the tougher job she would be contributing twice as much to the economy. But she wouldn’t be doing herself much good. It would make more sense to take it easy and spend more time with her high school senior daughter, Casey.
How did a middle-class single mom wind up with a 79% marginal tax rate? At $120,000 she would pay $16,500 a year more in federal and state taxes, wouldn’t qualify for the five-year $12,000-a-year cut in her mortgage payments she’s applying for and would be eligible for $19,000 a year less in need-based college financial aid.
I made this exact Galtian decision sometime last year. I realized that if I went into Big Law, I would spend countless hours at a difficult job, only to be rewarded by the Government taxing most of the marginal income above a certain level. Why bother? Shrug. I would rather do what I love, make less, and get to keep more of my earnings.
Why should society punish people who want to succeed? Why should incentives discourage people from realizing the maximum of their potentiality? Why should the government place the strongest yoke on the backs of those who keep this society afloat.
Who is John Galt?