The USA tried to balance this with crazy tax rules and brackets, where you will get rewarded if you massively out-earn your partner. My buddy was actually lamenting the fact that his wife got a nice raise at the public library because it would actually mean less take-home money after tax day.

> My buddy was actually lamenting the fact that his wife got a nice raise at the public library because it would actually mean less take-home money after tax day.

There are relatively few scenarios where this would occur. It would have to be something like a sharp phase out of a deduction or credit or some sort of benefit. I don't think the usual graduated phase outs would do it for any material change.

Are you sure that this is not just a misunderstanding of how marginal tax rates work?

I am not GP, but I know that there are massive cliffs in Obamacare credits for people that use them. When you exceed 400% of the federal poverty line you can lose >$10,000 of credits because of a single marginal dollar of income.

Other situations with cliffs

Yup that's one of the few situations I was thinking of.

Not trying to be condescending, but your buddy might not understand how marginal tax rates work.

  taxB > taxA

  $salary * (1 - taxA) = take-homeA

  $salary * (1 - taxA) + $raise * (1 - taxB) = take-homeB

  take-homeB > take-homeA

In short, if his wife earns more, only the new, additional income is taxed at a higher rate.

Increasing pretax retirement contributions would’ve fixed that (would’ve dropped their tax bracket while putting more away for retirement).

They also have a house and some other tax complexities. You are probably right, but that kind of illustrates the ridiculous nuance with US tax law.

The US tax code has a lot of interests competing against each other (revenue vs benefits for different constituencies); I agree it should be simplified, but that takes substantial effort and political will. Changing your 401k contribution is 15 minutes.

Choose the hill to die on carefully.

This is a common idiom in US speech, like saying "choose your battles."

When you compare your salary do you include taxes and differences in the commodity prices?

Taxes yes - in addition to occasionally checking tax calculators I know what our after-tax income is in both places.

Commodities - not in a rigorous fashion. I know we have more at the end of the month. If it's because we just buy less stuff that's OK with me. As I mentioned, we save a lot just not having to own or operate a car; we walk or cycle most places. Health insurance is also far, far less expensive (about 2500 EUR per year for a family of three), and even if that was "included" in my pay in the US, somebody was paying for it.