Disclaimer: at this point in time, I don’t have to worry about how much my tax burden will be when I go over $250K in gross income. I want to earn that much, but don’t yet. In thinking about it, though, maybe I don’t want to. Why should I if it’s just going to get taken away by Obama & Co.?
That dilemma is the subject of a Wall Street Journal Online article today: Jonathan Clements Says the Bonus Tax Creates a Disincentive to Work.
That would be me. Once my total income hits $250,000 for the current calendar year, I will have no incentive to work a single day more in 2009. After all, for every extra dollar of income I earn above $250,000, I will lose 90 cents of the bonus I received earlier this year.
Being somewhat knowledgeable about personal finance, I’m trying to figure out how to finagle this. By minimizing my investment income in 2009 and pushing other income into 2010, I reckon I can delay the day of tax reckoning. But even with that finagling, by mid-October, I will hit $250,000 in total income — and have no incentive to earn any more income in 2009.
At that point, I plan to ask Citi for an unpaid sabbatical. Forget earning more income. There’s no point. Instead, you will find me hunkered down at home, desperately trying not to spend money. This will make entire financial sense for the Clements household. What about the struggling economy? Not so much.
Some of you cheer using the tax code to punish achievement. Not that you use that as the reasoning – the reasoning is to ‘spread the wealth’. As if someone who doesn’t earn it deserves a sizeable chunk of what *I* earn.
What if the wealthy people, the high earners that you steal this money from, decide that it isn’t worth it any more? Then where are you?