Two Income Trap and 50-Percent Money

Spot-on book by Elizabeth Warren and her daughter about why families aren’t making it on two incomes.  If you’re reading this blog, you’re probably aware of some of the reasons, some of which lead to the nonsensical result of earning less than your outlays.  Failure to accurately account for taxes, a second car and gas, work clothing, etc. could have a working mom earning McDonalds wages after everything is netted out.

My husband, who is a tax policy economist, recently figured out that everything we earn for the rest of the year is 50% money.  What does that mean ?  Well, we’re in the child tax credit phaseout and have reached the level of income where our marginal rate is now 50% such that we keep 50% of everything we earn for the rest of the year and send the other 50% to our friends in Washington.  I’m no great economist but I did learn about the trade off between labor and leisure and this recent nugget has me thinking pina coladas.  Since we don’t have 9 to 5 jobs but instead are business owners who have to drum up our own business, I am feeling quite tired and think I’ll take a nap and tell Washington to shove it…..they’re not getting my 50% money.