Suppose you are currently employed. Last year your income rose to $40,000 from $30,000 a year earlier and your taxes rose to $3300 from $300.
Suppose you are currently employed. Last year your income rose to $40,000 from $30,000 a year earlier and your taxes rose to $3300 from $300. This year you do not expect any change in income from your day job, but you just received $1000 from your aunt, which you have of choice of investing in one of two ways: one pays 4 percent per year and the interest earned is taxable at your current marginal tax rate and the other 3 percent and would not increase your taxes at all. Which should you pick and what does this example have to do with thinking on the margin?
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