Yellow Freight closure thread

Imho me thinks everyone is missing the original point...Will you make more money for more hours? YES....
The point is....where does the higher tax bracket kick in.,,therefore the amount of net pay for those hours is greatly reduced.... typically assuming time&1/2 it’s somewhere near 55 hours
Someone stated earlier that on a 40 hr week the take home $1200
On a 60 they get 1400 and 70 it’s 1600
So 30 hours of ot nets them 400 more take home....that may be a lil simplistic... but not far from the truth...you’re earning power decreases exponentially as your tax burden rises

 

But you should also be earning more paid time off by working overtime. There's a lot of value in that too.

 

No, depending on what you're asking.

Since at least 1969 there is no scenario where earning more money will result in a lower net income. Even then, the circumstances where earning an extra dollar would cost you more than a dollar in taxes would be extremely rare. My guess is you'd have to go back to 1955 to find any likely scenario where earning more would net a person less. Even then it wouldn't apply to a rank and file worker.

At $30/hr (which I used as my base calculation), assuming all other considerations are the same, a person working a 50 hour week would net $63,318 after Federal and California taxes. Working a 70 hour week they would net $91,278. On a per hour basis, they net .60 per hour for every hour worked, or a 3% raise in their hourly wage. Rough math is a person earning $30 an hour on a 40 hour week nets $23 an hour. On a 168 hour week they net $27.50 an hour, or roughly 20% more per hour worked. No matter how you want to do the math, earning more results in a higher net per hour worked, unless you take overtime out of the equation, then the break even is 75 hours of work (I think, I'm rather sunburned at the moment). I will happily concede the point that in the current tax code there is an inflection point where the"Laffer Impact" will disincentivize wage earners from working more, but I would argue that gross income would have to be between $130,000 and $175,000 in annual income for that to happen. Over $175,000 in income, effective tax rates start dropping.

The real question - "is the extra income worth it?". Over a year, at $30 an hour with overtime, working a 50 hour week would net at least $63,000 while a 70 hour week will net at least $91,000 (depending on state/local taxes and benefit deductions). Is the extra $28,000 net income ($500 a week) worth the time away from home? That's for an individual to decide.

 

And consider when you retire, your SS(if still around), will pay out at a higher rate. Unless you are already at the maximum income bracket to pay into SS.

 

I’m completely confused about 168 hour work week
But if you get 23 from 30 on straight time and 27.5 on ot
Yes ur losing 12.5 and hour on taxes
While you only loose 7 on straight time
since the op point was you pay more taxes or higher rate working overtime
This math seems to back up this statement

 

The original post argued that a person would pay more in taxes then they'd earn.

Yes, a person will pay more in taxes (both absolute and effectively), but the extra taxes won't consume all the extra income.

 

Why can't we just have a flat tax rate that everyone pays? It would take away the punishment of trying to better oneself.

I know this goes back about 15 years, but at the time, I worked for a farm equipment dealer. They really didn't care how much I worked as long as I was being productive. I was essentially their tax write off, given that I did not really contribute anything financially to the company. I didn't pull wrenches to repair equipment, I merely set up the new stuff and drove truck.

Anyway, we were paid every week at the time. I worked a lot of OT. I figured 55 hours was about the optimum amount to get the largest take home pay per week. Anything over 55 hours I was loaning money to the government. Ultimately, I'd get some of it back at the end of the year, but I didn't want a big check at years end, I wanted the money now!

It made me realize the stupidity of our tax code.
We had tax brackets that would literally punish a person for being productive. And I guess we still do for that matter.

Just using generic numbers here, but if I make $15k a year, and I'm taxed at a rate of 10%, and I'm at the high end of the tax bracket of $15.5k, why would I work any harder to make $16k and be in the higher tax bracket, which then would charge me a rate of say 12% on the extra $500 I made to get into that higher bracket?

It's lunacy. Everyone should pay the same percentage, regardless of their earnings.

 

'' It would take away the punishment of trying to better oneself.''

You just answered your own question

 

By that I'm assuming you mean a certain group of people doesn't want another group to be somewhat successful?

For what it's worth, I've also gotten to the point that I'm not gonna let the tax code dictate what I do, if I want something I'll get it, or do it and worry about the taxes later. That holds true in many other areas of my life

 

Yes of course,its the American way.This Country is gonna morph into two classes...the haves and the have nots.