if you make $1000 per year, your tax rate is 1%...?

Question

For each additional $1000 you make per year your tax rate goes up by 1%. For example if you make $24,000 per year you would pay 24% in taxes. If you could set your salary anywhere between $0 and $100000, what your want it to be and why?

(not in the real world of course...)

Answer 1

The optimum salary under these conditions would be $50,000 per year. At a 50% tax rate, your tax would be $25,000, leaving you a net of $25,000. Any higher salary starts to decrease your net pay. Example:
Salary of $51,000 - tax rate 51% therefore net pay 49% = $24,990. It gets worse from there. In fact, if your salary was $100,000, your net pay would be $0!!!! Yikes!!

Answer 2

That's not how the income taxes work, of course, but as a hypothetical, you would want to earn as much as you could until the cost of paying the tax equals the added income, because you would still make more money working than not. Some people would prefer not to work to pay the government, or have some other point at which they do not want to pay more taxes (when taxes take half or more of the earnings increase, for example).

Some people are smart enough to know that paying for a police force as a group, for example, is a lot cheaper than paying your own policepersons. Or paying for street repairs for all the streets you use to go places and come back is a lot cheaper if everybody contributes than if you pay for the repairs and maintenance yourself.

On the other hand, there will always be people who are happy to let some other sucker pay for what they get the benefit of.

Answer 3

50,000

You set an equation x-x^2*.01=0

Take the derivitive to find the max value.