Hacker News Reader

>> I don't see how flat or even marginal income taxes disincentivize people from making more money

When you hit higher tax brackets it gets more difficult to negotiate a raise with your employer, because to get X more money for yourself you need your employer to spend 1.4X more on your salary. Flat tax rates have no such effect.

View on HN

But as a marginal system only taxes the income above the cutoff at the higher rate, you would still make more money.

For example, you are making $99k and paying 4% (pretty close to many state income taxes) on that with the next bracket at $100k with a 6% rate. You get a raise to $110k which means you are making an additional $10360 after tax and only paying an additional $200 in tax (4% vs 6% on that $10k). I don't see why you need a 40% increase.

Reply on news.ycombinator.com