[gnaritas]

I've found most people don't understand marginal tax rates. Many seem to think that jumping up into the next tax bracket by even one dollar will make them make less money than they made in the lower bracket on less pay.

I was stunned one day when I heard my boss, a small business owner, say something to this effect over lunch, as well as another co-worker. I told them they didn't know what they were talking about and that's not how taxes work and he cited his years running a business as a reference and claimed I was naive and clearly wrong.

I bet him he was wrong and he took me up on it; after lunch I took him to our accountant and had him explain it, then pointed him at Wikipedia. Amazing that one can be an entrepreneur for 15 years and not know this.

Part of the problem is how we talk about taxes, we say things like tax cut for people making less than 50k rather than the more correct tax cut for the first 50k of your income. The former seems to be talking about someone else while the latter clearly means you too, while avoiding the us vs them mentality that seems to turn off most people's brains. I've made it a point to make sure everyone I know understands marginal taxes now.

[jacobolus]

It seems to me (as a biased observer) that a big part of the language/understanding deficiency here has just been that the GOP and its very effective messaging apparatus deliberately uses language that increases that confusion, and the Democratic Party is incompetently happy to adopt the same language, despite the clear harm to their platform.