However, I am aware of no circumstances in which earning more money results in less take-home pay. I'd be curious if anyone else has ever witnessed or empirically verified such a thing.
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I believe this is called the "Marriage Penalty". Unfortunately, many people do not understand it and I have heard a lot of the same arguments over the years that is better for only the "breadwinner" to work and the other person to do nothing.
https://en.wikipedia.org/wiki/Marriage_penaltyIn this article it explains how the tax code can have some negative consequences for a married couple with incredibly high incomes. For instance, if the wife makes $250K and the husband makes $40k you will probably not run into a problem. If both the husband and wife make $400k each, married filing jointly can result in a higher tax burden. Granted, if your combined annual income is $800k I can't believe too many people will shed tears that you are paying a little extra tax. At any rate, they can just file MFS and be done with it.
Lastly, my personal pet peeve with people and taxes is most people I know do not understand the difference between a marginal tax rate and an effective tax rate or how the graduated structure works. I have to endlessly explain to people that they are not paying 25% of their income in taxes. They are only paying 25% once they hit that bracket and then after their refund are only paying about 10%-15% overall (many cases much less).
I don't think American has a taxation problem so much as a situation where the taxpayers do not understand how the system works. Politicians of course will endlessly exploit this lack of knowledge.... Don't even get me started on how most Americans believe that corporate taxes are the highest in the world at 35% considering most companies don't pay anywhere near that rate or even pay income taxes!!