3d ago

Is 33 cents a small amount of money?

I feel that “outgroup dumb” is shitposting but it’s from a real poll.

https://today.yougov.com/politics/articles/5057-understanding-how-marginal-taxes-work-its-all-part

178 comments

Hmmm, I better send a suggestion letter to the ATO (Australian Taxation Office) to put the tax bracket breakdown directly into your return with the amounts populated.
Hey, they give us a breakdown graph of where our tax is going, this seems like it's within the realm of possibility.
I think sadly there are also many people here who have no idea how tax brackets work...

These people are allowed to vote, and that is why we are all fucked.

this was pushed in the 80's/90's on conservative talk radio (iirc). strangely, it gets an ideological push from the phenomenon of income reduction resulting from lost welfare benefits as income increases. the brain correlates things irrationally.

Where i live we have a system where if you take sick days, they are paid 80%. 20% reduction applies only to the days you were sick. Once I got sick at the end of a month and took the last 3 days of the month and first 2 days of the next one off and my mother in law freaked out I'm about to loose 20% of 2 month's salaries. She was and is still convinced that 20% deduction applies to a whole month worth of salary even if you take one day off that month. She almost never takes sick days and she works in a hospital... She self medicates and works with patients even when she has a transmittable diseases. Best of luck to those who have serious health problems and then get a fucking flu on top of everything from hospital staff. She is 60+ and reading the law to her doesn't change her mind. A couple years ago she had more serious health problems and took a week off for the first time in decades, even after getting a paycheck reduced only by 5% and not 20% her perception of this issue didn't change. She misunderstood that system once 40 years ago and she is going to take that misunderstanding to ger grave. Real world has no influence on her beliefs.
- That's the general conservative mindset. It's why lies work so well on them, get them to believe the lie and they'll never let it go.

This is absolutely an educational failing. We barely cover taxes in school. At best it's said once in a class, gets covered in a minor question on a test and if we get it wrong, no one notices. "We" probably still got a B on the test without any CLUE how taxes work.
Yet here we are, dismantling any nationwide effort to make education better.
A LOT of people think 99,999 tax is 27,999 and 100,001 is 29,000, even on the democrat side. If those charts are accurate, it's probably damn close to 50% of US citizens.
- I seriously don't understand why we don't have a mandatory class that covers taxes, T4 slips, investing, labour laws, budgeting, reading nutritional information on foods, etc.
  
  The nutritional stuff is like 6th-grade science, about the time you should be burning peanuts with a Bunsen burner.
  I've seen a few schools that have an elective financials class, but I think they're still trying to balance checkbooks.
  The problem is it's just one class, and nobody takes classes seriously in high school. Most of them have forgotten the things that they used to know when they were 20, 30, or even 40 years past their education.
  It's like we need some kind of driver's ed test but for living
  edit: 6th grade, no fire in elementary school
  
  It was all covered in my Florida education. For the most part it is just a very small amount of information that people tend to forget it. It also isn't all taught in one class. (T4 slips are called W2 forms in the U.S. for those questioning). The investing thing is a broad generalization though. I assume because it may get considered an overlap of teaching kids to gamble. Everyone was required to take either micro or macro economics in high school though for us, both of which touched on stock market invement mostly just tied to the idea of a 401k (retirement accounts).
  Nutritional labels were covered in science classes multiple times, but we're touched on in middle school science, and we were all required to take a home ec class for half a year in 7th grade which taught about it as well. Again in physics and chemistry classes.
  W2s were covered in our mandatory typing class as a form of data entry, because most people only take the data from boxes off the W2 and enter them into a tax program. Then the tax brackets were taught to us in middle and highschool.
  A lot of it to me is that we don't pay attention in school and forget a lot over time. Nutritional and Tax bracket questions were on both the ACT and SAT. Which are national tests required to get into colleges.
  
  WTF is T4 slips

This belief is held by many older folks due to propoganda, and it is passed down to their children when their parents teach them about taxes. Since almost all younger folks use automated tax services, if they aren't doing the math themselves, the fact that this isn't true isn't going to be discovered. I was taught the incorrect way when I was a kid, but noticed that it was wrong the first time I had to do my own taxes. But when I told my parents the way it actually worked, they didn't believe me until I showed them the .gov site that breaks it down. I grew up in a small, blue collar town, and every single person I talked to about taxes parroted the same incorrect system.

I'm just in awe about those 28% and 33% tax brackets. I'm in the 49,5% bracket here in The Netherlands. That being said, I'm fortunate to be in it.

This is the problem. My partner doesn’t want to work OT because he thinks it will cost him more in taxes. I explain why that’s not exactly true, but I can tell he’s not interested. Financial Literacy in the US is abysmal.
- it's just not the US. I live in the Netherland and many people here think OT and bonuses are taxed differently, because they see a higher tax rate applied to it on their slip. They forget that their base salary covers multiple brackets and a tax credit. Thus has a lower average tax rate than their OT and bonuses which falls in their top bracket or even a bracket above.
- Tbh, literacy in the US, financial or otherwise is abysmal right now.
- Your partner is a moron who doesn't understand relatively simple math.
  
  Nah. He’s not an idiot. But he is impatient. He doesn’t handle paperwork or anything involving patience well. (ADHD)
  I also think taxes in the US are intentionally over complicated and confusing. I don’t struggle with things like that but I can empathize with people who do.
  
  There’s not enough information provided to reach this conclusion.
- This is not a US specific issue, tbh. I've heard this weird belief repeated by all sorts of people.
  
  it is a misinformation many people in power wants to keep because it lets republicans sell their policies to not tax the rich and bosses to not raise their employee's salaries.
  
  You’re absolutely right. I cant speak for anyone else, as I don’t live there but I highly doubt the US is an exception.
  Rather than being mad at each other, I want to make sure we hold the right people accountable! Governments, corporations, billionaires etc.
  It’s a form of oppression.
  
  I've heard it in Australia too, which has the same tax bracket system as the USA. I think the fact that this stuff isn't taught in school is a major issue.
- "you can't make less money by making more money"
  
  Unless you're poor enough to be on welfare. The Welfare Cliff is awful.
- Oddly enough it kinda does. OT can make you pay out more taxes on that one check since withholdings are calculated by check. Basically the government/payroll system thinks you're going to be making that every week so more taxes will be taken out.
  In reality this only effects the size of your tax bill or return at the end of the year.
  
  That's what people see and exactly why they think they got kicked up a whole tax bracket.
  
  Exactly, and it also depends on what withholding you have requested.
- Run, if it's not too late.
  
  We all have our weaknesses and faults. No need to dismiss every relationship due to imperfections.
  
  Nah. He’s not a bad person or a dummy. He just gets frustrated by bureaucracy and doesn’t have the patience I have.
  
  Nah. There's good people here and even the people who voted for this deserve to have their needs met, many of then are only personally responsible for a tiny fraction of the immense harm caused by the systems of power. And they may not have caused any harm in the first place if they lived in a place where people are always taken care of as well as is reasonably possible. there is immense pressure to shed empathy and embrace individualism and forego the many benefits of community such as efficient and effective collaboration, for example to prevent a disease from spreading or at least reducing the harm it causes. As many of us can see, especially obviously in the US, the goal and function of the system isn't actually to stop causing harm in the first place, or even reduce the harm that must be caused for your society to function, the cruelty is often very much the point. Non-absolutely essential needs are less and less profitable to meet the less common it is to have the need, and the amount of wealth that can be extracted from the people with whatever need is the only thing that really determines what gets things done, and subjugation and not giving folks a chance to think critically and question their circumstances by completely overwhelming them with horrible information (including dis- or misinformation) about the world and making them think they're threatened by whoever is opposing efforts to make line go up. Most folks don't stand a chance without direct intervention and time spent with someone directly affected by the system in an obvious way, including possibly the person themselves.
  At the very least I owe it to my family to stay and be as helpful as possible to the people who have supported me and hopefully others who don't deserve what's coming if a major effort of community organization doesn't happen
- I've had jobs (more than one), where working OT would result in my paycheck take home pay being less than if I had not worked the extra hours. And that's because it moved me into the next bracket, and more taxes were taken out. So why waste my time working OT?
  
  I think you're on the wrong side of the chart here.
  
  That's not how is works though.
  I'd you made say 1500 normally and 2000 with ot your take home could be 1200 and 1400. Paying more taxes overall on the ot but still taking home more.
  There is no way you'd take home less money because taxes are paid on the first $1500 @ $300 and say the next $500 @ $300 too at a higher bracket. Overall your pay is still higher though even though your taxes "doubled".
- By design
  
  No, they teach you this in high school. These people are just dumbasses

No source?
- https://today.yougov.com/politics/articles/5057-understanding-how-marginal-taxes-work-its-all-part
- Don't need one. The amount of times I've had to explain how fucking tax brackets work, I wouldn't be surprised if the numbers were even more skewed towards the wrong answer.
  
  This is how missinformation spreads though. If something lines up with your existing worldview then you just assume it's true.

It boggles my mind how many people who have had to pay taxes for decades even, don't understand how tax brackets work.
The only time you'll get screwed on making more is if you were getting some sort of socialized assistance and you make a dollar over the cut off for aid.
- Yeah, the Welfare Cliff is the only place where this happens and it's unconscionable.
- It is kind of by design to keep people from trying to get ahead at all
  
  And to keep the private tax filing agencies afloat

And this why democracy won't work. How can people votw in their best interests when they don't know how basic taxes work
- even if people were mega geniuses it wouldn't matter, money talks, and it talks a lot louder than people

If you ever wanted proof that a population that doesn't understand math allows the billionaires to take advantage of them here it is. This is why education systems are under attack, because if you understood how taxes work you'd more likely support higher tax rates for the rich.
- I think this is at least partially the result of intentional propaganda. It benefits the elite greatly if a lot of Americans are screaming against higher top tax rates due to this faulty logic. There are also a lot of anecdotes of people not accepting higher paying job offers or promotions within their company, which also benefits the business owners.
- If you ever wanted proof […] here it is.
  Yes! Well yes but also no but only because…
  ~~@General_Effort@lemmy.world I always do the web search when OP didn’t happen to think about linking a source but this is egregious~~ DANGIT IT’S A SHITPOST I AM SO SORRY
- Probably the lead poisoning have something to do with it.
  Some houses still have lead, to this day.
  I know because my city recently passed a law requiring landlords to inspect rentals for lead paint, because a lot of kids are still getting lead poisoning.
  (Its Philly btw)
- https://youtube.com/shorts/-621rVJvUdY
  Mr. "Population collapse is the biggest threat to the world."
  Maybe it's just the biggest threat to capitalism and your ROI. Why do you think he's supporting the make everyone dumber party?

How dumb do you have to be? By the time you make that much money you should, in theory, know the answer definitively or have a guy.
- Almost everyone has a guy or uses some software. Those two things don't help them understand and this misconception of how taxes work is but a small sample of how people form political decisions without any viable understanding of the situation they're in or the repercussions of their actions.
  Nobody's just making out a check for 30% and mailing it off to the IRS.

To be clear for those unaware, you pay the lower bracket rates for the amounts earned in that bracket and the higher bracket rates for the amounts earned above that bracket.

https://www.irs.gov/filing/federal-income-tax-rates-and-brackets
- ~~This is actually not true as it doesn't take into account the standard deduction~~
  
  Read the chart, it says taxable income.
  Deductions and other tax games may lower you're taxable income, but the progressive tax brackets apply this way to all taxable income.
  
  I upvoted because you chose to strike thru rather than delete. Big props for that
  
  It does not take into account a lot of things, namely the many many deductions for qualifying individuals.
  
  Not all people take the standard deduction, this is true before all deductions and similar economic stimuli.

When you are talking large income to larger income, that makes total sense, but are there limits for access to things like child tax credits where if you go over you are no longer eligible, causing significant increase (I just looked, and it's at $200k single of $400k jointly, so unless you have A LOT of children, I suppose there wouldn't be a huge effect)? Similar to people on government assistance who go from getting full assistance to getting nothing at a certain income level?
- The big one there is food and housing subsidies. The way way we have it set-up can create a situation where a raise can cost you benefits that are worth more than the raise. With disability benefits there can actually be limits on the amount of money you're allowed to have in general, which means that disabled people can find themselves in places where not only do they need to avoid trying to find work that they might be able to do, since trying and failing can still make them need to restart the benefits application process or even pay back historical benefits, but they also need to reject gifts above a certain value and can't prepare for any type of emergency, like a car breakdown.
  It's annoying because it creates a disincentive to do the things that would help people on assistance actually get off of it, when the people who push for those limits purport to want them for exactly that reason.
  Tapering off benefits as income grows, but at a slower rate than the income growth creates a continuous incentive for a person on benefits to increase their earned income. (If you lose $500 in benefits for every $1000 in income, your $1000 raise still puts $500 extra in your pocket, instead of potentially costing you your entire $8000 food subsidy)
  Can't do that though, because it doesn't punish people for the audacity of needing help.
- This is a big factor. A lot of people conflate less benefits with higher taxes because fear-brain just knows they both equal increased hardship in the end. They're technically wrong but their statistically slightly more active amygdalas are responding to a genuine threat, just one that they've been very skillfully misdirected into helping worsen.
  
  So an indoctrinated fear response that create a policy advantage for the very elites who created it.
  Wow humans are so nice

I used to be a supervisor at a psych hospital and had to regularly explain this to staff who were refusing overtime. They wanted to do it, sometimes desperately so because they needed the money, but they were utterly convinced that once they crossed 40 or 45k or whatever they would be taxed higher and make it all pointless. I felt like some just didn’t want to do ot, which was fine, but some legit keep meticulous records of their earnings to ensure they wouldn’t go over the line. I swore to them it didn’t work this way but they never believed me
- Should print out a poster infographic explaining progressive taxation and put it up on the wall in the break room
  
  Yeah I am pretty sure they wouldn't understand this either
  
  This infographic is kinda bad and would not convince someone who doesn't know how it works at all
  
  But you have to keep it going to highlight how much wealthier people pay (although that’s tougher since their income is not “income”). Maybe throw in a few examples of the wealthiest Americans and wha recent age they pay, to not only clarify it, but retarget their anger where it belongs
  
  Would have to be mandated by workplace regulations, no company is going to voluntarily educate their employees that more money has no downside.
  I'll also say this doesn't help, it strangely avoids the actual numbers. It should state explicitly that his total taxes would be $1,600+$4,266+$2,827=$8692, and not $13200. Needs to include the scenarios specific results and contrasted with what the viewer would have assumed otherwise.
- Seen the same bullshit when I worked retail. Nothing will convince them.
  It's easier to trick someone than it is to convince them they're wrong.
  
  I wonder how different the planet would be if boomers had just been taught, from an early age, that it's OK to be wrong.
- We covered how taxes are calculated at school, it isn't very complicated. Yet SO MANY people insist they end up getting paid more it made me question myself for a while.
  Although sometimes the removal of certain benefits does mean people can be worse off for £1 extra. Which if anything is just a sign that the benefits were poorly thought out and should taper off instead of being a hard limit.
  
  There is probably sticker shock involved. Someone who gets a raise will see a new amount of taxes witheld and may be upset. It could even be they didn't know what the amount taken out before taxes was.
- The only way that's a problem is if you're on certain government benefits, if you make just a little bit too much there's a hard cutoff for many benefits so you may end up losing more than you made in OT. But if your staff is facing this dilemma, they need to be paid more.
  
  Pay them more? So they can lose their benefits? Are you crazy?
  I’m kidding, of course. I know that what you mean is, “pay them so that they can afford to live without requiring benefits.”
  You get into some of the poorer places in the country though, that truly would be nearly impossible for most businesses. There are some places in West Virginia that would immediately have no access to gasoline, groceries, etc.
  It is crazy to think that Bobby McBusinessman gets to ride around in a giant RV all summer because the government pays his employees. They don’t see it that way though, as they collect their HUD payments and accept food stamps while all of their employees receive food stamps and medical benefits.
  All while the rest of the community lives on nothing and experiences very little joy in this life.
  What do I know though? I’m just a pissed off hillbilly who helped make someone who isn’t me very rich.
- Short of doing a demo with rolls of change or MnMs or something, asking people to conceptualize math that is not just simple addition is often asking too much. Especially when people's financial literacy is learned at home from people who retired in 1996.
  
  Well look where we are, trump loves the uneducated, they got his thieving rapist ass elected.
- every day, my theory that people are just willfully retarded gets proven more and more correct. Even with the tools at the disposal of the modern internet savvy person, nobody tries ANYTHING to verify ANYTHING.
  It's actually so fucking depressing and i think humanity is joever at this point. I'm not sure how you recover from this point effectively.
  
  I mean in defense of these staff: many of them were not amazingly well educated and were pulling 80-96 hour weeks pretty regularly to earn a livable wage. When were they supposed to do this research?

try telling this to people who think government agencies pay taxes
- Poor Sam
- Sam is the GOAT
- That dude would have been hilarious if he wasn't really so delusional. Not Sam, he was great. The dude that was convinced that government agencies get tax breaks.
- What? Is this the onion?
  
  One of those rage bait YouTube channels had a young person who made that claim in a debate. Pictured is Sam Seder who was the debate opponent. He made this face at the camera.

For someone outside the American tax system, can anyone put the difference in approximate numbers?
- This all boils down to a common misconception about 'tax brackets'.
  To simplify, pretend there's a 28% tax bracket up to 100,000 dollars, and a 33% tax bracket when you hit 100k. The first 100k is always taxed at 28%, no matter what you make, and it's only the incremental amount that gets taxed heavier. So here in this example, that would mean tax burden would be 28,000.33 instead of 28,000.28. These are not the exact brackets or percentages, but it's at least showing the right magnitude of increase versus total amount.
  However, many people are "afraid" of bumping a higher tax bracket. They think the tax bill would go from 28,000.28 to 33,000.33. That the tax bracket bumps up all your liability. I remember growing up people saying "I have to watch out and not hit the bigger tax bracket, if I'm close then I need a big raise to make it worth it, or else the raise is going to cost me more than it would make me". This a big driver of antipathy toward democrat tax policies, a belief that mild success will punish them, despite it only increasing on the incremental amount.
  
  A lot of US benefits have "benefit cliffs" where making $1 more substantially reduces or even completely disqualifies a person from programs like SNAP (food stamps) or childcare subsidies or Medicaid. https://www.ncsl.org/human-services/introduction-to-benefits-cliffs-and-public-assistance-programs
  It's not surprising people whose families are directly affected by, or who know people affected by, benefit cliffs think the lawmakers set up taxes the same way.
  
  We took a huge hit in our cost of living when we fell off the benefit cliff. I know it's lost credits rather than more taxes but it doesn't really matter when you make more and struggle at least as much as before.
  
  To be more specific the first 100,000 isn't taxed at 28%. The 44 to 100k range would be, but below that will be taxed at lower percentages. The first ~10k you make is taxed at 10%, and then it increases throughout.
  
  German income tax works the same and most Germans get it wrong too. It's really infuriating.
  
  OK, so it is similar to our system. And would probably in the range of cents or a few dollars then.
- In exact numbers, 5 cents.
- That one dollar in the 33% bracket has .33 in taxes instead of .28. So their obligation goes up .05 per every dollar in the 33% tax bracket.
- Your local tax system probably works the same.

I'm more concerned about the third of dems who don't understand this.
- it's in the shitpost community and there's no sources cited
  
  I feel that "outgroup dumb" is shitposting but it's from a real poll.
  https://today.yougov.com/politics/articles/5057-understanding-how-marginal-taxes-work-its-all-part
  
  My tired brain read your comment as "shitpost economy" and somehow that still made sense to me.
  
  Oh

And they'll also refuse to believe you when you try to explain it to them

Tell me you don’t know how income taxes work without telling me you don’t know how income taxes work.
My question is who does their taxes then?
- A lot of people don't know anything about taxes and have their tax return done by an accountant, even if their situation is extremely simple (works one job, no taxable investments or capital gains, no investment properties, no foreign taxes paid).
  
  Even if they did go through the trouble to do their own taxes, the IRS specifically instructs taxpayers to not calculate it themselves, but rather to use a "tax table" to lookup their income and next to it is listed their income tax amount.

Thanks, Lemmy, now I’m “that Dad”. After reading this, I went to dinner with my two teens and one of their girlfriends, so of course I had to bring this up. All three have started working after school and will need to file their taxes this year so they need to know.
But holy crap is that a seriously uncool conversation

lol i wonder how much that is just guessing. they just coin flipped it

Hungary used to have a system, which worked like what the republicans imagined, which made "taxing the rich more" a widely unpopular move...
- FWIW globally, there is the issue of "welfare traps". Benefits for low income people are usually tied to income (or savings). Once income reaches a threshold, these benefits must be replaced with income. So a higher income may result in a net loss.

Shouldn't it be physically possible to be taxed so much that your income lowers compared to what it was previously?
Like you would have to have a 20% bump in pay, and an increase in taxes that's like 25-50% or something insane. Of course if you cherry pick data, and pick a high ceiling, and then just barely pass a threshold you can probably make it appear, but that would be a pretty well defined statistical anomaly. And, not very much money.
edit: and this is assuming that taxes literally just don't work the way that they do, this is WITH broken tax logic.
of course, the idea of a progressive income tax is that at a certain point, it becomes untenable to hold so much money. But unless taxes are literally 100% it's hard to make the argument that you're "losing" money.
- If the tax bracket for no taxes is $10k, you don't get taxed if make under that.
  If the tax bracket for 5% is $10-20k, and you made $15k, the first $10k is not taxed, but the $5k is taxed at %5.
  So you would never make $0 after taxes, even if you made it into the hypothetical 100% tax bracket.
  
  yeah, with how tax brackets actually work, this should be physically impossible, i'm just pointing out that even if it didn't it would STILL have to be a pretty substantial increase in tax, that you could easily calculate.

i dont understand, isnt this graph showing that 2/3 of democrats dont understand how taxes work vs only 1/3 of republicans? wouldnt correct mean that yes, your tax bill goes up?
- The options were that your taxes go up by a small amount or substantially. The correct answer is by a small amount since you only pay higher taxes on the one dollar that you're over.
  
  oh i see now. thanks.
- Nah, also you're never going to lose out on income by making more money.
  Like others said, the only possible exception is if you're getting government assistance and get kicked off programs you're in because you went past the cut off. So, as an example, let's say you're low income and you get vouchers for school. You could make enough money that you're no longer eligible for that benefit but the amount you make over the cut off is less than what the benefit was.
  But, that's a specific situation. At no time will your taxes increase more than whatever additional income you're getting. Period.
  I've tried to explain that too many times now in my life and I'm not even that old. Just a lot of people are bamboozled by propaganda and lies.

That’s a loaded question. Poor methodology.
- What?
  The question isn’t loaded at all, it just tests whether people know how tax brackets work.
- Yeah what does "substantially" mean in this context and what are we even measuring? In terms of percentage units, the step from 28% to 33% is definitely a substantial increase. The question doesn't specify whether we're talking about total dollars paid or just how much the tax percentage increases in that bracket.
  
  Yeah what does “substantially” mean in this context?
  The context is laid out clearly. You earn one additional dollar and that one additional dollar puts you in the 33% tax bracket.
  Your tax bill would go up by 33% of one dollar. $0.33. Total.
  The question doesn't specify whether we're talking about total dollars paid or just how much the tax percentage increases in that bracket.
  It’s irrelevant. Your “total dollars paid” in taxes would increase by $0.33, and the difference that extra dollar is taxed vs the previous dollar is $0.05. Neither of these are “substantial.”
  This question simply asks whether 0: you have reading comprehension skills and 1: you understand how tax brackets work.
  
  I feel like "your tax bill goes up" is such a simple question.
  It means total dollars owed

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