But wait, let me anticipate your response: you calculated the time value of excess money withheld because of your 15 minutes of overtime and determined that at prevailing interest rates letting the government hold your refund money for a few months represented a net loss to you — an unacceptable opportunity cost for a shrewd one like you.

Of course, that only held true for trivial amounts of overtime worked per year (minutes, maybe an hour total), but by golly, it’s a winner of an argument. You really are a genius, dwkunkel.

I became aware of this whole issue because one paid period I worked an hour and a half of overtime and actually received slightly less net pay than if I had just worked the standard 80 hours. I investigated and found that the extra pay had put me into a higher bracket and therefore significantly more money was withheld. If I was willing to work a LOT of overtime, I could increase my net income, but small amounts of overtime were negative.

After this episode, I started keeping close track of where I was in the tax bracket maze and adjusted my hours accordingly. It turns out that this was not an uncommon practice at the time.

I was making enough money at the time to end up in the higher brackets.

I believe that.

I was projecting taxes based on the previous year’s tables and adjusting for expected bracket creep.

Wow, you were really ahead of your time, since “bracket creep” didn’t come into usage until the late ’70s and stagflation.

I agree that by working some limited overtime I could have possibly increased my annual net income by some small amount, but by doing so I would have been working for an effective hourly rate that was significantly less than the minimum wage.

Ah, now we get to the nut of it. You lied.

The remark that I would actually be losing money probably qualifies as crossing into the murky realm of hyperbole . . .

Nah, nothing murky about it. You lied to advance a partisan agenda and then persisted in your lie.

. . . but isn’t that an essential part of posting on blogs?

For you, perhaps. I think you’ll find folks who read TBP — who run the spectrum from far left to far right, btw — have a nasty bias in favor of fact/data-based commentary. Nobody’s really impressed with some bullshit income tax anecdote you manufactured for propaganda purposes.

I was making enough money at the time to end up in the higher brackets. I was projecting taxes based on the previous year’s tables and adjusting for expected bracket creep. I agree that by working some limited overtime I could have possibly increased my annual net income by some small amount, but by doing so I would have been working for an effective hourly rate that was significantly less than the minimum wage.

The remark that I would actually be losing money probably qualifies as crossing into the murky realm of hyperbole, but isn’t that an essential part of posting on blogs?

Sorry but I think you might have been better off becoming “very conversant” with a JD/CPA at that time instead of doing your own taxes. :)

What many people do not understand (sounds like maybe you do understand) is that the tax tables are set up to tax ranges of income and not to apply just the top bracket rate to all annual income. This is not to argue that a “steeply progressive” structure does not create some disincentives to bring in income in the highest ranges. But frankly I’m a little skeptical that taking some overtime that gave you income in the next bracket would have caused you a net loss. It’s possible but I’m skeptical. Especially since you might have had a hard time getting hold of current year tax tables early in the year . . .

This was almost 40 years ago, so I don’t remember all the details. I have always done my own taxes so I was very conversant with the tax tables and the progressives steps in effect at the time.

Explain please. Crossing the threshold into a higher tax bracket does not automatically mean that average tax paid on taxable income for a given year is equal to the higher marginal rate. You have to look at the tax tables to get the real picture in a progressive system.

Would you mind providing the tax year(s) in question?

Ironically, it’s not that depressing to me…

If the tone of my words seems to indicate otherwise I’d simply call that the “expression” of the sharing of knowledge amongst others that have peeled back several layers of veils…

No doubt it’s absurd…But at the end of the day, I’m not really depressed at all about it…

As the Chinese say, “may you live in interesting times”…Times are interesting, that’s for sure!

hmm interesting….the tipping point where the gov’t robs you of more and more chunks of what you’ve earned….wonder where that is….

another 3 years of head-in-the-sand?! God help us.

I’m going to follow HT’s advice and get/ read a copy of The Forgotten Man and see if there are any clues to be had…then at least I may know what NOT to do.

Cheers!