Emily Friedman wrote an article for ABC News that was heavy on the fail. She interviewed an attorney who was planning on cutting back her earnings so that she would stay below $250,000 and be free of Obama’s marginal tax increase that kicks in at that level. Well, that plan would be just super if that were even close to how marginal tax increases work. 

Eric Martin: 

Wow.  That is…just mind boggling.  Allow me to explain the concept of marginal tax rates to our would-be Jane Galt (and her admirers, like Tennessee law professor (I’m as incredulous as you) Glenn Reynolds).  The marginal tax rate structure means that you pay a certain rate for money earned within certain dollar amount brackets.  So, to simplify with hypothetical rates: you pay zero income taxes on dollars 0-20,000, then you pay 15% on dollars 20,001-50,000, you pay 25% on dollars 50,000-100,000 and so on.  You don’t pay a higher rate on all of your dollars just because some of your dollars make it into a higher tax bracket.  Only those dollars above the given threshold are subject to that rate.