I laughed my ass off when my racist uncle smugly explained that he turned down a raise, because that would put him in an upper tax rate and cost him more money than the raise was worth.

Tried to explain how income tax works. Didn't go through that thick skull of his.

[–] sp3ctr4l@lemmy.dbzer0.com 16 points 2 days ago* (last edited 2 days ago) (1 children)

Yep.

A graduated tax structure is evidently just literally too complex for about half the population to understand.

Throw 'how is Social Security funded' into that as well.

The top bracket is 176,000 and everything above that.

All it would take to keep Soc Sec funded is just add more brackets after that.

But nope, America is full of morons who think that their dumb ass making 40k or 80k is going to see a higher tax bill if you explicitly only additionally tax those making stupendous amounts of money.

[–] bane_killgrind@slrpnk.net 2 points 2 days ago (2 children)

Had an ex try and convince me that taking overtime pay instead of banking hours would net me less money for the same reason.

[–] GoodLuckToFriends@lemmy.today 2 points 2 days ago (1 children)

That can happen, depending on your company's payment software. One place I worked at would calculate the expected tax burden based on the highest paycheck you made, so if you worked 50% overtime (thus making 175% of your normal paycheck), it would be placing you in a way higher tax bracket for the rest of the year, and you'd have to reclaim it all in the refund when you did your taxes.

[–] bane_killgrind@slrpnk.net 1 points 1 day ago

Yeah this is just the payroll processor intentionally fucking with people, not how taxes work.

[–] sp3ctr4l@lemmy.dbzer0.com 2 points 2 days ago (1 children)

The only scenario I can imagine that making sense in is if you are getting SSI or SSDI and the overtime you exceed the threshold to keep receiving benefits, but would not exceed the actual SSI benefit itself.

Or for SNAP or TANF or something.

... the only other scenario I can think of is your ex is commiting tax fraud.

... or they can't understand middle school level math... =[

[–] bane_killgrind@slrpnk.net 2 points 2 days ago

That last thing

[–] Malfeasant@lemm.ee 6 points 2 days ago

Some people are terrible with money. Take my wife... (Please) - after 20 years she suddenly* decided she wants a divorce. Rather than either of us keep our house, she wants to sell it and split the equity we get out of it. Fair enough, I can agree with that... But then she said she wanted to dump it on a flipper for 300k, when comparable houses have gone for 430-450. I said if you're going to let it go that cheap, let me buy you out. I crunched the numbers, we owe 150k, so I'd either refinance or assume the loan, and give her 75k (her half of the difference between the sale price and what we owe) - she accused me of trying to screw her over. "I'm not letting you have the house for $75k!" "That's right, you're not- we (the couple) would be selling it to me (the individual) for $300k, it's the same as dumping it on a flipper, just that I'm the flipper!" There was no getting through to her. Eventually she agreed to try and sell it properly for what it's worth.

*to me... Evidently she had made up her mind months ago, but wasn't going to tell me until her job situation improved...

[–] Iunnrais@lemm.ee 40 points 3 days ago (1 children)

This misconception is widespread enough that I can only think that it is deliberately perpetuated by the ruling class to save them money. The number of people who are convinced that going up a tax bracket could mean you make less total money is astounding, and many of them are like your uncle— utterly convinced to the point that being informed correctly sounds like naivety to them.

[–] Trigger2_2000@sh.itjust.works 3 points 2 days ago

Another example is "Don't work overtime, the taxes cost more than you make."

Unless your marginal tax rate for your overtime is > 100%, that's simply false. Given that all marginal income tax rates in the US are < 100% (that I know of).

[–] venoft@lemmy.world 7 points 2 days ago

If you're on some social security program it could be wise to turn down a small raise. At least in some places. Once you earn above a certain limit those benefits stop and you actually lose money.

[–] jjjalljs@ttrpg.network 7 points 2 days ago

I had to explain progressive taxation to a coworker a while ago. Admittedly he was in his mid 20s and was a self described bad student. To his credit he actually understood. He also went back to school some time later and got an undergraduate degree.

Sometimes there's hope for people.

[–] GoodLuckToFriends@lemmy.today 1 points 2 days ago

I don't think tax brackets are explained very well. I'm relatively intelligent, and didn't understand until I was in my early 20s, at my first real job, and made a comment during the financial retirement introduction. Luckily the person leading the orientation took 30 seconds and blew my mind.

[–] jumjummy@lemmy.world 1 points 2 days ago (1 children)

Except you’re ignoring tax credits. There are a slew of tax credits that only apply at certain income levels and below. It is very possible that you can suddenly no longer qualify for a credit by getting a small raise which is less than what the credit would have given you.

Always consult a tax advisor.

[–] RichardDegenne@lemm.ee 5 points 2 days ago

Ah sorry, I live in a country where we don't require every single citizen to hire an accountant to file their taxes.

My condolences.