Having a progressive tax system means tax rate increases disproportionately with the more work you do. And that’s a good because working less is encouraged by a reduced avg tax rate.
But what happens when you take a year (or 5 years) off? You live off savings that were taxed in higher brackets while earning zero. IOW, consider:
- Bob works 6 years straight earning 50k/year.
- Alice works 3 years earning 100k/year then takes 3 years off.
They both had the same gross earnings per unit time but Alice gets screwed on taxes because of the progressive tax system. My pattern is comparable to Alice due to forced full-time gigs that refuse part-time. My refuge is to subject myself to being over-employed for a stretch then quitting for a stretch of bench time. The only remedies I see:
- Take a 1-year contract starting in June. Do not work the first ½ of the 1st year, and do not work the second ½ of the 2nd year.
- Form a corporation, work as independent and direct your own “false independent” 1-person company. Money builds in the company as you pay yourself the same amount whether you are working or not. (Some people put the company in Hong Kong because it accommodates this well and the company feeds the director gradually and persists well after retirement – or so I’m told)
- Work in a country that adjusts for income fluxuations by giving you a tax credit if your income drops substantially from one year to the next.
I made up number 3. Does that exist anywhere?
Any other techniques to hack around forced full-time scenarios? Or to deliberately fluxuate working hard and not working without the tax penalty?
You’re basically saying “fuck Europe” (to use your technique of building a man made of straw). This is not a US-only forum. Roths are a US invention and they are US-specific. Canada has something somewhat like it but not quite (no conversion option IIRC, which blows it), and at least parts of Europe (if not all of Europe) have nothing at all like it.
Apart from that, it’s bizarre that you think I would have any problem with Roths. Where do you think you read that? Roths are a great tool that actually supports my goals – though in one country only. And only for as long as conversions are allowed, to the extent they are allowed, and to the extent of 401k limits and conversion limits.
Ah, so anti-work is an elitist movement that excludes some demographics of people you hate? Nonsense. Middle class people can (and should) practice anti-work philosophies. Please fuck off with the: this is for poor people only exclusivity. The geocentrism can fuck off too, particularly when simultaneously coupled with pretentious ass-hattery. Uber Eats contractors would be appalled with the prejudiced grouping you have stuffed them into. The poor people you want to restrict the anti-work movement to don’t have the 401ks needed for the Roth conversion approach to work for them.
YOU, are not the one I was calling lost here, and I DO NOT agree with the commenters who gave you shit(did you even read the end of my first paragraph?), but thanks for joining the circle of butthurt.