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Current Events > "I refused a raise because I'd go up to a new tax bracket"

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BignutzisBack
03/16/24 2:42:59 PM
#1:


Have you ever heard someone say something like this? It's been a few years since I have but I wanted to die inside whenever they said it. I even had a manager once tell me she refused a raise because she didn't want to get taxed more

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#2
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archizzy
03/16/24 2:44:35 PM
#3:


Ive never known anyone to say this.

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sabin017
03/16/24 2:45:08 PM
#4:


Only stupid people would say that unless it isn't a progressive tax system.

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UnholyMudcrab
03/16/24 2:45:44 PM
#5:


sabin017 posted...
Only stupid people would say that unless it isn't a progressive tax system.
Good thing there are no stupid people in this country. That would sure be bad.

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CableZL
03/16/24 2:45:45 PM
#6:


I have heard someone say this. It's so stupid, and it comes down to people not understanding how taxes work.

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ClayGuida
03/16/24 2:50:10 PM
#7:


You truly start to realize that even if you feel dumb, you're still far more intelligent than like 75 to 85% of Americans.

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Guide
03/16/24 2:51:55 PM
#8:


CableZL posted...
I have heard someone say this. It's so stupid, and it comes down to people not understanding how taxes work.

Exactly.

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RetuenOfDevsman
03/16/24 2:52:22 PM
#9:


I actually had this thought myself once, though in my case, I assumed something that stupid couldn't possibly not have been accounted for and did the research to figure out how it really works.

In fairness, the way American taxes work is just plain stupid. It's way too complex. They really need to change some things.
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LonelyStoner
03/16/24 2:54:20 PM
#10:


My current dipshit of a boss said this last month.

Im too tired of the ignorance at my workplace to even argue, though. They can stay where they are, and they deserve it.

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Sheiky-Baby
03/16/24 2:54:40 PM
#11:


They just say it to look good, while taking the raise. After all, it's not like salaries for each employee are pinned on the wall for all to see.

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King_Rial
03/16/24 2:55:20 PM
#12:


I explained this to my little sister last year. She's a bank executive.

EDIT: She didn't turn down a raise, just pissed at the tax bracket.

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RetuenOfDevsman
03/16/24 2:58:23 PM
#13:


FTR, if anyone doesn't know, the tax brackets apply to each dollar.

So your first dollar is only taxed at the rate of the first bracket. You only start paying at the rate of the next bracket with the dollar that passes the threshold.

What this means is you'll never end up taking home less by getting a raise.
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LonelyStoner
03/16/24 3:01:35 PM
#14:


RetuenOfDevsman posted...
FTR, if anyone doesn't know, the tax brackets apply to each dollar.

So your first dollar is only taxed at the rate of the first bracket. You only start paying at the rate of the next bracket with the dollar that passes the threshold.

What this means is you'll never end up taking home less by getting a raise.
I might need this explained like Im 5.

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littlebro07
03/16/24 3:02:21 PM
#15:


Only really legit reason to turn down a raise is if youre currently qualifying for welfare benefits and the raise would make you disqualified but not be enough to pay for stuff on your own.

My sister in law was trapped in a shitty job for like three years because of that. Finally got a new job paying 3x what she was getting so she was able to finally get off welfare and out of poverty.

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DoctorPiranha3
03/16/24 3:03:04 PM
#16:


I've heard it several times. Morons.
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PokemonExpert44
03/16/24 3:03:46 PM
#17:


Lol so rite TC.

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Hinakuluiau
03/16/24 3:06:35 PM
#18:


RetuenOfDevsman posted...
In fairness, the way American taxes work is just plain stupid. It's way too complex.
It's really not that hard.

LonelyStoner posted...
I might need this explained like Im 5, but Im not doubting you.
It's easier in image form:

https://gamefaqs.gamespot.com/a/forum/1/1aabaa86.png

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Zwijn
03/16/24 3:06:55 PM
#19:


There are cases where certain benefits get cut with a raise but no idea if the states have a system like that.
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LonelyStoner
03/16/24 3:08:14 PM
#20:


Hinakuluiau posted...
It's really not that hard.

It's easier in image form:

https://gamefaqs.gamespot.com/a/forum/1/1aabaa86.png
Damn I know for a fact my boss doesnt make $95k a year. This is honestly hilarious considering his remarks.

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RetuenOfDevsman
03/16/24 3:08:53 PM
#21:


LonelyStoner posted...
I might need this explained like Im 5, but Im not doubting you.
It's not as complicated as it sounds but it's kinda weird to explain in a general sense, so I guess I'll use last year's brackets as an example.

A single filer in 2023 was taxed at 10% from 0 to 11k, and 12% from 11,001 to 44,725.

So if you made 12k for example, 11k of those would be taxed at 10% and oy the last 1k at 12%.

This is equivalent to (as I've seen it presented before) saying that you owe 1100 + 12% of (your income - 11k)
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Justin2Krelian
03/16/24 3:10:04 PM
#22:


Ill admit, I didnt really understand it until my mid 20s

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party_animal07
03/16/24 3:10:33 PM
#23:


Why not explain it to them instead of just labeling them morons? One could actually cause a chain of people to learn something while the other serves zero purpose.

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Justin2Krelian
03/16/24 3:12:20 PM
#24:


The CT State income tax starts to phase out the deduction amount and even lower brackets once you go high enough, which even I dont really agree with.

Still, even then I dont think it would ever be logical to avoid a raise.

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Naysaspace
03/16/24 3:13:10 PM
#25:




Yes. A lot of people dont understand marginal taxation.

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RetuenOfDevsman
03/16/24 3:14:39 PM
#26:


Hinakuluiau posted...
It's really not that hard.
Each individual piece isn't, but as a whole, it's a nightmare.

For example, our family has two incomes, two dependents, donations to multiple organizations, considerable property and we buy and sell cars and homes pretty frequently.

Every year it's a months-long cycle of

"It wants a ten-ninety-what?"
"Do we have it?"
"... No."
"Ok, let's see if we can get it and try again next week."
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Trumble
03/16/24 3:29:56 PM
#27:


It's a somewhat common misunderstanding. It happens here too, where the tax system is not designed to be as complex as humanly possible, and I've seen it from people who are otherwise quite smart. It's all about explaining it right - I find it helps to focus in particular on "the first $X still gets taxed at the low rate" (specifically using the word "first" in particular).

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lilORANG
03/16/24 3:57:07 PM
#28:


I've never heard someone claim to refuse a raise but I occasionally hear people say they got a raise and now take home less bc they're in a higher bracket.

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kyujo
03/16/24 4:16:07 PM
#29:


Zwijn posted...
There are cases where certain benefits get cut with a raise but no idea if the states have a system like that.
There are a few cases like that in usa, but nothing absurd I've heard of to make this worth it

lilORANG posted...
I've never heard someone claim to refuse a raise but I occasionally hear people say they got a raise and now take home less bc they're in a higher bracket.
Probably the company taking too much out. Pretty easy for us to refile W-4s when we want

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BewmHedshot
03/16/24 4:17:53 PM
#30:


archizzy posted...
Ive never known anyone to say this.
I've only heard of it secondhand.
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superbot400
03/16/24 4:20:07 PM
#31:


BignutzisBack posted...
Have you ever heard someone say something like this? It's been a few years since I have but I wanted to die inside whenever they said it. I even had a manager once tell me she refused a raise because she didn't want to get taxed more
Pretty dumb.

You have to make over 100k+ before taxes effect. It also depends if you are blue or red state. You would be REALLY dumb to think this in a Red State. So your in blue state, right, right?

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Block_that_Kick
03/16/24 4:23:12 PM
#32:


So many people think California income taxes are so expensive. But unless your household is making over $1 million, its very likely youre paying less in California than you are in your own state.

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Solar_Crimson
03/16/24 4:28:34 PM
#33:


archizzy posted...
Ive never known anyone to say this.


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BewmHedshot
03/16/24 4:34:15 PM
#34:


Block_that_Kick posted...
So many people think California income taxes are so expensive. But unless your household is making over $1 million, its very likely youre paying less in California than you are in your own state.
Fact check: false

https://www.google.com/search?q=California+income+taxes
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LightHawKnight
03/16/24 4:38:21 PM
#35:


Block_that_Kick posted...
So many people think California income taxes are so expensive. But unless your household is making over $1 million, its very likely youre paying less in California than you are in your own state.

And the same people who think Texas is great cause there is no state income tax.

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NightRender
03/16/24 4:42:49 PM
#36:


I haven't heard this in a long time, but I still occasionally get "I just lie about my dependents to payroll to get a bigger tax refund."

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Tanthalas
03/16/24 4:59:15 PM
#37:


I hear this in Portugal too, where people say they don't do overtime otherwise that would put them in a higher tax bracket and they'd receive less money.

Technically, here it's possible to get a raise or do overtime and get less money in a given month, but the overcharged taxes are returned to you when you file your annual tax report.

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Hexenherz
03/16/24 5:04:31 PM
#38:


I saw someone post that on reddit and I schooled them (politely) on why the logic is flawed. Really need to have some sort of financial education courses in public schools for real.

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Notti
03/19/24 6:09:18 AM
#39:


King_Rial posted...
I explained this to my little sister last year. She's a bank executive.

EDIT: She didn't turn down a raise, just pissed at the tax bracket.


Come on... How old was she?

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Serious_Cat
03/19/24 6:26:58 AM
#40:


That was one of those things that I believed because I'd heard somebody say it and the math seemed to check out.

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Dark_Arbron
03/19/24 6:29:56 AM
#41:


BewmHedshot posted...
I've only heard of it secondhand.

Same. I knew it was a thing but I dont exactly spend much time discussing tax rates with people.

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tankboy
03/19/24 7:32:28 AM
#42:


It's also worth mentioning that the income tax brackets are after any deductions. So (for example), if you make 100k and deduct 10k, you are not paying anything in the 24% bracket that starts at 95k.
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