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I'm not sure how seriously I should take this advice when the authors website looks like this:

http://www.optimalworks.net/

The article is spot on, and it's not on the topic of design... It's on business models for freelancers. And I bet he does pretty well! :)
If he does work mostly for corporations, then his website is spot on.
I typically hate on websites pretty hard, but actually I don't have much problem with that site. Maybe it's a bit orange, but it's clear and usable. What are your objections to it?
* No visual heirarchy since everything is incredibly saturated

* Useless stock icons are way bigger than the text describing them

* Horrible use of white space

* Weird margins and padding

* Constantly moving animation at the top right

* Tacky quotes like "We will not rest until you have a site to be proud of."

* Only 2 clients ever (and only one of them even has a screenshot)

* Their RSS feed names their blog "BLOGNAME".

I'm not attacking the site, just listing the things that jumped out at me.

True but being a good designer and being a good business person are two different things.
Well, you miss the most important part- usability. It looks pretty good to me!

And btw, good developers might not be good designers!

This is sensible, but can't he find someone to compare us computer folks to besides used car dealers? That's not painting a happy picture in many people's minds.
Agreed. The analogy also breaks down quickly because there is no car dealer that sells both a 10-year old Ford and F1 McLaren. Generally, dealerships offer very narrow bands of value within that large range.
Don't be a used-car web dev then. Be the luxury sedan - sport car web dev. I explain to my clients (not necessarily through this analogy) that I'm definitely not the cheapest dev/designer they'll be able to find, but that they'll gain more quality, etc. for more money with me (with case studies to back that claim up). I don't sell my clients used cars, and so they don't expect to pay used-car rates with me ;)
Why does this site eat 50% of my CPU?
Close down those porn tabs you have open? idk. lol
I like to charge a flat rate for the first X number of hours, then charge $Y/hour after that. This forces me to gather the requirement before making an estimate. It discourages the customer from adding new requirement unless it is worth $Y/hour to them.
My small experience with charging is related specifically to the client size.

If you want to charge $350/hour, weekly and on a long basis, odds are you'll be charging a corporation and not a household.

My experience also, you probably won't get $350/hour even if you charge the client so. There will be middle man, taxes, vat, payment delays, accounting and many other expenses...

That's why you should be charging at least $200/hour. And that's for the very mundane, and noncompetitive tasks.

Note that this really depends where you are from. In my part of Canada, you would be charging around $90 to $120 / hour.
I'm doing remote work. Currently in an underdeveloped country.
I'm doing remote work in a major US city. I've been charging well above market rates for a while now, but haven't been able to break the $100 / hour barrier yet.

I feel like my income is stagnating -- my skills and expertise are at the top of their game, but I just haven't been able to find projects where I'm able to charge more.

Where should I be looking? Is there an effective way for me to change my approach?

Can you elaborate more on how to get to that number and any sources you have? :)
I've seen and used just about every approach to this, yet the author completely skips the most lucrative approach, the subscription based model.

I've used this on larger clients and have had great success with it. It gives them a sense of comfort since they're paying me monthly to keep their content fresh and SEO up-to-date and still have the opportunity for a redesign after a year. Plus, it gives me a nice chunk or recurring monthly revenue and establishes a long-term relationship.

This is a part of a series and more models would be discussed subsequently.
Note: At the top it says "This entry is part 1 of 1 in the series How to Charge"
Part 1 of 1? So there is not going to be a part 2?
At the end: "In my next article, we’ll look at an alternative pricing mechanism: charging per hour."

They probably can't say "1 of 2" until the next article has been published.

How does this model usually work with web design? Is it simply that the client subscribes to n hours per month for updates, hosting isssues, etc? Then if the client wants substantial work done, they can temporarily contract for more hours?
Usually what happens as part of the subscription, they pay for each individual part of the work. So design is one part, development is another. Content is another and SEO is another. Newsletter articles, responsiveness, and other features are all individually priced.

In the end, they might have 6-10K worth of services they want, so you just put them on "subscription" and let them pay monthly. At the one year mark, you can let them redesign and update the content and seo, which usually involves more development, more content writing, etc. You basically bill them again with say a 10-15% discount and then you're good for another year. You can also offer additional services at a discounted monthly rate as well like writing blog posts or articles that are added to their site on a schedule so it helps with SERPS and content weight of their site.

Here's a question: why does the model website-as-a-service works for blogs, but not for other kinds of websites?

You see, wordpress.com charges for blogs, ghost.io charges for blogs, other people give blogs for free, but still benefit from it somehow, also there's the example of portfolio WaaS like 4ormat.com, but this model only applies to these cases, never to hospital sites, restaurant sites, hotel sites, book sites, or any other kind of website.

Then people in need of these other kinds of website always fell into building a blog, even paying for other people to build them a self-hosted pretty awful solution Wordpress blog. has this been tried?

Sounds like an opportunity...