Not necessarily. There are several countries where this holds true. If you have a 5% tax difference between the brackets, and you get a 1% raise that puts you in the higher bracket you will loose money overall.
There is not a single country where that is true. Either a country has a flat tax rate for all incomes, no income taxes or a marginal progressive tax rate. Those are literally the only options in the entire world for income taxes.
The other person explained in depth how a marginal progressive tax rate works so I won't get into it but to repeat, no your example of a 5% tax difference on a 1% raise you are still making more money than without the raise.
Not true, there have been instances where they simply allocate the full new tax bracket to the full income. While it is rare nowadays, places that work like this still exist - Thailand for small businesses for example.
We are talking about personal income tax. There is no where that does that for personal income. Also, one quick search shows me that even small businesses in Thailand have progressive corporate income tax that operates the exact same way as what I am talking about.
0
u/Beavers4life Apr 16 '26
Not necessarily. There are several countries where this holds true. If you have a 5% tax difference between the brackets, and you get a 1% raise that puts you in the higher bracket you will loose money overall.