Had a buddy say that recently. Granted, he's not in the US, but the same concept applies.
As an accountant, it makes my head hurt.
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People don’t understand tax brackets.
- Thread starter BannedEpisode
- Start date
Had a buddy say that recently. Granted, he's not in the US, but the same concept applies.
As an accountant, it makes my head hurt.
It's not so much about the "stupidity", but more so about the efficacy of propaganda. I've seen news stories run with people basically complaining about the higher tax rate with absolutely no correction or pointing out of the basic fact that that particular conceptualization is wrong.
People are clueless about estate taxes, too. I hear people complaining about them fairly often (death taxes!) and I think "Are you planning to win the lottery next week?". How the fuck can you be past your life expectancy, have already done your will, and NOT know about the massive exemptions?
That misleads on marginal taxes, if anything. I was expecting the girl from Wonder Years, an IRL math wiz, to point it out to him but it never came. That video is about progressive tax rates, not marginal tax rates.
Vox did a piece recently about it that's ok: https://www.vox.com/policy-and-poli...ket-marginal-cartoon-ocasio-cortez-70-percent
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I'm considering making an interactive web toy that lets people play with tax rates and incomes to see how it works.
The only income bracket that regularly faces effective marginal tax rates over 100% are... poor people who lose eligibility for welfare programs. Of course, most people complaining about high marginal tax rates somehow never get around to talking about this...
"Suppose that your income put you at the very top of the 28% tax bracket and you earned one more dollar such that you were now in the 33% tax bracket."
Below: Changes in your tax burden based of the above scenario
https://today.yougov.com/topics/pol...standing-how-marginal-taxes-work-its-all-part
This is very old. I can only imagine it has gotten worse on the republican side of things with the way the party has changed in the last 6 years
Below: Changes in your tax burden based of the above scenario
https://today.yougov.com/topics/pol...standing-how-marginal-taxes-work-its-all-part
This is very old. I can only imagine it has gotten worse on the republican side of things with the way the party has changed in the last 6 years
This perfectly encapsulates how bullshit it is to think republicans are the 'tough but smart' party vs dems being the party of feelings, which is basically the common wisdom because americans have some sort of toughness complex that makes them intuit that policies that help people must make us weak or something."Suppose that your income put you at the very top of the 28% tax bracket and you earned one more dollar such that you were now in the 33% tax bracket."
Below: Changes in your tax burden based of the above scenario
https://today.yougov.com/topics/pol...standing-how-marginal-taxes-work-its-all-part
This is very old. I can only imagine it has gotten worse on the republican side of things with the way the party has changed in the last 6 years
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They need to really teach basic math and paycheck/tax/money math in high school. People just don't get it. My step daughter had one elective in HS where they touched on it for 30 minutes or so... that's it.
People just don't understand money at all, it's mind boggling
Edit... oh christ at the tax stupid being split so unevenly along party lines... Lol sad
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That's great
People just don't understand money at all, it's mind boggling
Edit... oh christ at the tax stupid being split so unevenly along party lines... Lol sad
Edit 2
That's great
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From the same survey, this is also pretty telling:"Suppose that your income put you at the very top of the 28% tax bracket and you earned one more dollar such that you were now in the 33% tax bracket."
Below: Changes in your tax burden based of the above scenario
https://today.yougov.com/topics/pol...standing-how-marginal-taxes-work-its-all-part
This is very old. I can only imagine it has gotten worse on the republican side of things with the way the party has changed in the last 6 years
"Here, for example, is percent correct broken down by political knowledge and party. (The political knowledge variable is the number of factual questions about politics that the respondent gets right, questions such as which party controls the House of Representatives.) "
Basically shows that republicans that are more engaged with politics got the tax question wrong more often, suggesting they watch a lot of conservative media that misleads them about the issues.
6 weeks on credit cards, compound interest, loans
6 weeks on the basics of taxes, brackets, "writing off something"
6 weeks on budgeting, saving, planning
Yeah I always do get those dollars back when I do my tax. The problem is my debt from going to Tafe many years ago, I get extra tax withheld as payments off the debt . Once that is payed off I won't have this problem at all.
It doesn't bother me, because I don't actually loose any real money.
Had a buddy say that recently. Granted, he's not in the US, but the same concept applies.
As an accountant, it makes my head hurt.
Most people can barely understand taxes it's quite hilarious. Keeps us in a job though!
See this all the time in threads where rich people donate money, seen it here even.
"They are just doing that to lower their tax bracket and actually save way more money than they gave."
1) That's not how that works
2) Rich people aren't anywhere near the highest tax bracket anyways lol
Or simply; "They are just giving it away for the tax write off."
Also, confront anyone about any of these issues and 100% of the time they will claim they knew how it worked.
"They are just doing that to lower their tax bracket and actually save way more money than they gave."
1) That's not how that works
2) Rich people aren't anywhere near the highest tax bracket anyways lol
Or simply; "They are just giving it away for the tax write off."
Also, confront anyone about any of these issues and 100% of the time they will claim they knew how it worked.
It drives me insane. I remember making this thread on Negoaf lol.
Wish they would teach accounting basics or financial basics and statistics to everyone. But instead we have to focus on making sure as many kids as possible get through Calculus and other college prep type STEM classes now. So... That's not ever going to happen.
I agree with the poster saying it's a lack of motivation. It's the 21st century - explanation of tax brackets is literally a click away if one wishes to learn about them. Took me a few minutes to guesstimate my approximate return by looking at the IRS website
I think in psychology there is a thing in where humans have a tendency on preferring avoiding unfairness (punishing thieves, for example) even above benefiting themselves. In other words, people prefer not being stolen $200 THAN winning $250. It's illogical, but it's a bias we have to make individual humans work in society.
I say this because maybe it's related, if your father reaction is taxes = money he is losing, and bigger taxes = he is losing even bigger amount of money. Conveniently ignoring the higer base amount of money he was getting.
People are dumb, but a lot of it is the intentional result of conservative propaganda. I remember one time fox news was on in the break room at work, and Neil Cavuto who is supposed to be the main finance/business talking head on Fox was talking about marginal rates as if they were effective rates. He's not that dumb. Its all lies to trick the less informed.
People keep repeating this line, but where are you cutting 2 semesters from? This can be part of the problem solving section of basic math and algebra courses, but already schools fall into one of two categories. If they have freedom they already include personal finance into math, if they are teaching towards standardized examns they only look at the multiple questions aspect. We cannot just decide to downplay trigonometry, algebra, arithmetics, etc to teach simple applications
Maybe we can? Everyone needs personal finance to a degree, it's really an important knowledge base in our society, much more so than trig to be honest.
A matter of priorities.
I'm surprised it's not taught in schools - I had to take it, although it was widely viewed as a goof-off class and many of the teachers didn't put much effort into it. Doesn't seem to be taught any more, either, or it was rolled into something else (called Career and Personal Planning when I took it, was a one semester class in both grade 11 and 12).
I remember having to complete a handful of sample tax returns by hand.
edit - it's still taught, here in Alberta, at least. Taxes, financial planning, budgeting, credit, investment, insurance, unexpected expenses, etc.
I remember having to complete a handful of sample tax returns by hand.
edit - it's still taught, here in Alberta, at least. Taxes, financial planning, budgeting, credit, investment, insurance, unexpected expenses, etc.
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I think this is kind of a bad question though in a very basic sense. Say someone does not understand marginal taxes and believes that their whole income will now be taxed at 33% rather than the 28% they were paying previously. Even if they believe that, someone could see a change of 5% as being a "small amount," whereas others could view the 5% change as a "substantial increase." The question should be a little more drastic in the change in bracket, say going from paying 10% in the lower bracket to 90% in the higher bracket. That or they should just ask for a numerical answer to really drive the point home and avoid the subjectivity of what people view as small and substantial increases."Suppose that your income put you at the very top of the 28% tax bracket and you earned one more dollar such that you were now in the 33% tax bracket."
Below: Changes in your tax burden based of the above scenario
https://today.yougov.com/topics/pol...standing-how-marginal-taxes-work-its-all-part
This is very old. I can only imagine it has gotten worse on the republican side of things with the way the party has changed in the last 6 years
I mean Trigonometry is pretty essential knowledge in society. You wouldn't have a lot of things without it...
Why not teach both?
You're probably right that trig is helpful to society. The difference is that pretty much every single adult needs to handle their finances. Trig may be important but very few people actually use it. Teach it to engineers in college.
Teaching both in HS would be fine, but my original reply was made to someone who stated there wasn't time to teach finance cause kids needed trig instead. Assuming he's right about the time constraints, I argued that the time should be spent on personal finance instead.