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Itâs a huge messaging and education failure that half the country doesnât understand marginal tax brackets.
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I am curious how many people that picked âsmall amountâ actually understand that the added tax amounts to exactly $0.33 and how many just guessed.
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Someone we know who makes like $60-80K says they pay 50% income taxes living in California and wants to move to Pennsylvania for that reason alone. They should be paying under 15%, the total difference in taxes versus PA would be around $500. Most people are morons, unfortunately.
Even off their top brackets, theyâd be paying like 30% total. Youâve got to be pulling down like a million, give or take, to hit 49%.
Not to mention at that income theyâre likely eligible for several government programs offered by CA.
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Itâs one of those classic Dem weaknesses where it requires a complicated explanation to refute a much simpler statement like âTheyâre raising your taxes!â and most people will just tune you out when you start trying to explain âYou only pay 22% taxes on your 47,151st dollar and youâd only pay an average of 11.5% in taxes on the money you earned before thenâ
Plus having a bunch of people who genuinely believe that if they get bumped into the next tax bracket theyâll make less money overall benefits scummy employers. Iâve seen plenty of posts on the personal finance subreddit where some poor sucker is talking about how they agreed to a promotion but luckily their boss was âlooking out for themâ so they were going to get paid the same so their taxes didnât go up.
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Yeah itâs mind blowing to me that in world where so many people looking for investments/coupons/deals/side jobs/tax breaks/whatever that such a large portion of donât take a couple hours to make sure they actually understand how their taxes work and why they pay what they pay.
Itâs reaaaaalllly bad. Iâve had to explain this to people who are âfinancial advisorsâ.
Yup Iâve heard multiple people at social gatherings talk about declining part of a raise to stay out of a tax bracket. When I told them they were costing themselves money they made fun of me for being stupid, âDONâT YOU THINK IâD KNOW, COMMONWEALTH??? I TALKED TO MY BOSS ABOUT IT!â
We can trace this back farther though. People donât know how compound interest works, they donât understand the difference in fixed and adjustable rate loans/mortgages, they donât understand secured vs. unsecured loans, they donât know how to negotiate pay, they donât understand how unions work and why theyâre good for a lot of people, etc, etc.
In a functional society this would all be taught in a personal finance/economics course in high school because itâs REALLY fucking important stuff to understand to have a fair chance out there in the world. But we donât, because the people running this country want a bunch of morons and suckers in their labor force, to lend to, and to exploit in every way imaginable.
I think fair amount of this stuff taught in school just lot of us were more excited about writing boobs on an upside down calculator at that age
I mean yes itâs a messaging failure but people are just really fucking stupid. I interact almost exclusively with high income highly credentialed people and theyâre almost all super fucking dumb. Itâs bad and hopeless and fuck man I have no solution.
As a high school teacher alum. Kids are fucking dumb
7.5 fica /medi
10 state
10 fed (net)
Thatâs 27.5. How are they getting to 50 on that income. Their marginal federal rate is like 12-15%. They get an exemption of about 1/3 where they pay nothing.
I suppose if they own a house they could be paying another 15% (say $10k property tax??). Then sales and other use taxes?
That said, MN and CA were both marginal 10% for me so I appreciate the 3.5 in PA.
I donât know how many people got super upset when a bonus had 20% federal withholding. There was absolutely no explaining they were getting almost half of that back.
Nah, this stuff wasnât taught in school, not in mine at least. Iâd remember. Kids are dumb, but weâre not even trying to teach them to make good financial decisions. People making bad financial decisions is THE feature, not a bug.
Google says the average California property tax is 0.71% vs 1.36% in Pennsylvania. So itâd take a 1.4M house in California to generate a $10K property tax bill, vs. a $735K house in Pennsylvania.
I would assume those property taxes are higher in a lot of the HCOL areas, so maybe it makes a huge difference. But Iâd also be shocked if they own a $1.4M house off $60-80K a year.
Either theyâre rich and they are trying to make it sound like an everyman problem, or theyâre stupid and brainwashed.
Humans arenât really good with deferred reinforcement. It does sting when a 10k bonus shows up as <5k on the next check. Telling yourself youâll get some of it back in a year when you do taxes is cold comfort when you wanted to but some new gadget.
Thatâs what credit cards are for!! (According to my ex)
Seriously having lived most of my life with piss poor rate on âcashâ savings means that I absolutely didnât mind the government owing me a couple thousand for a few months.
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No better way to prove youâre not familiar with Philly than do to a photo op at Genos/Pats cosplaying as a man of the people.