Andir, it's not possible for a raise to result in less money because of taxes. When you move into a higher tax bracket, you don't pay the new higher rate on all of your income, you only pay the higher rate on the portion of your income that exceeds the cutoff for that tax bracket.
Let me explain with a real example. In 2007, the first tax bracket is from $0 to $7,825. If your adjusted gross income (after deductions and credits) is less than $7,825, you pay 10% in taxes. So if you make exactly $7,820 adjusted in one year, you pay $782 in taxes. The next bracket is 15% and goes to $31,850. So let's say you get a very small raise and make exactly $8,000 a year adjusted. You pay 10% of the first $7,825, or $782.50, and then 15% of your remaining income, or 15%*(8000 - 7825) = $26.25. So your total taxes are $808.75. Before the raise, you made $7,038 after taxes. After the raise, you made $7,191.25 after taxes. There's no way for your after-taxes income to go down as a result of your before-taxes income going up.







