[blharr]

I think because the gradient is simply too confusing for laypeople to understand.

Even for a simple system like US social security that has a gradient. For every $2 you make over the limit, you lose $1 in benefits. I've heard countless times misconceptions of people thinking they'd be losing money (as in literally having less money net) by working.

[TeMPOraL]

Assuming that normies cannot understand gradients or feedback loops is IMO the source of a large amount of "tactical-level" problems in society, particularly around healthcare, taxation, and politics.

The better alternative would be to assume that normies are, in fact, capable of understanding these tools, and in the process forcing them to understand them by setting an expectation. I mean, this is what people should be told as answer when they ask, "what will learning math be useful for me in my life?". No, multiplying polynomials will not be useful to 99% of the people. But having a feel for basic linear algebra and feedback loops would be, because they describe the behavior of the simple and interesting control systems in any and all areas of life - which includes the Social Security examples of yours, too.

The worst thing is, letting majority of people off the hook here doesn't just impact them individually; in democracies, it prevents systems require certain level of understanding from being created in the first place. As shown in plenty of examples brought up in the discussion thread here.

So I guess one answer to "how is any of that math going to be useful for me in the future?" is, "if you all learn it, it will allow you to stop keeping yourselves in poverty in stupid and entirely unintentional ways".

[toast0]

Given that normies don't geneally understand tax brackets, I can understand not wanting to do more complex stuff either.

I don't know how many people I've heard express that they didn't want to move into the next tax bracket because they didn't want to pay that rate on their whole income, but it's a lot.

A very small minority are worried about hitting a ceiling that removes eligibility for important services, and some are worried about the weird phaseouts where marginal rates are very high, but most just don't understand.

Maybe that means having a more complicated system is fine because it's already incomprehensible to most, but I dunno.

[int_19h]

Tax brackets are very easy to explain, it doesn't even require math beyond basic arithmetics. You can draw a bunch of lines on paper and show how different slices are taken from each.

The problem is that the intuitive understanding doesn't line up with that, so that's what people have by default - and then we don't teach how it actually works as a basic skill! Sure, there's no shortage of explainers, but you need to be actually looking for them in the first place.

And the best way to teach that in school? Give students a small allowance that grows with each year, but they have to "pay taxes" on it to continue receiving it, complete with different brackets etc. I bet you that all the "normie" kids will figure it out in no time.

[entrope]

A single benefit usually has an appropriate incentive structure, but a lot of people get multiple benefits -- even from different levels of government (local, state, federal) -- and adding up phase-outs in different systems can result in marginal phase-outs rates above 100%. It's hard to avoid that entirely given that we want to have a lot of transfers to the bottom of the income distribution while phasing those out by roughly the median. It would be easier to avoid phase-outs above (say) 80% of marginal income is we only had federal and state aid as predictable money transfers, but for various reasons we provide a lot of transfers in-kind or with limited authorized uses. Those limitations aren't necessarily wrong, but they do mean that transfers aren't fungible, so there's an incentive to provide transfers for other "good" uses, and that diversity is what makes it hard to bound the marginal phase-outs for everyone.

[bostik]

This does happen in Finnish tax system. Your tax rate (percent with one decimal) is calculated based on your annual gross income. Rates are supposed to be calculated smoothly, and they are certainly calculated for each individual separately.

In reality they are step functions. It is surprisingly common to have people refuse promotions because if would put them above an income tax threshold, bump up their rate, and end up with less money after taxes in the end.

The UK tax system is far from fair but at least it has clear brackets: income above threshold X is taxed at rate Y.

[degamad]

Are you talking about this tax system? <https://nordisketax.net/pages/en-GB/taxation/?country=finlan...>

Because that is a marginal system, (and unless they've messed up the calculations, which they haven't in this case) you should never end up with less from earning more. Can you give an example of two income amounts where the lower income ends up with more money after-taxes than the higher income?

Or is it the additional municipal, church, or health levies mentioned on that page which have the discontinuities?

[eonwe]

This does NOT happen with Finnish tax rate. Your marginal tax rate can jump but that only for the euros after that bump. Your total tax rate goes up in more slowly. You’re always better off with the extra euro of income.

See graph here: https://www.veronmaksajat.fi/tutkimus-ja-tilastot/tuloverot/...

[procaryote]

I've encountered people talking about turning down a promotion to not "get above a tax bracket". They have invariably been wrong and just not understood the basic math, or done any research.

Lacking those basic skills might be a reason not to promote someone though, so perhaps it all works out for the best

[zipy124]

The UK system doesn't either though. The rate for 100-125k is higher than for 125k+ due to the phasing out of the personal allowance. It gets worse if you have kids and can even result in a >100% marginal rate.

[initramfs]

I agree, but almost everyone today can use a computer or smartphone. They can type in their income, and the computer can calculate it, providing them an average number of what their percentage of actual taxable income was- I think Turbo Tax and other software might do something like this.

They don't have to understand how it works to do their own taxes.

[blharr]

They can, but what would make them think their initial misunderstanding is even wrong? While some might think "surely the system isn't like that..." many would default to "of course they want to steal my money" etc.

Not to mention the amount of misinformation that can get passed around

[initramfs]

I get that, but let me give you a typical example. Your tax software as a box where it asks you to enter your income. It automatically estimates how much your tax refund as soon as you type in one field, even though it is just the first page. It updates automatically, and changes often whenever you add more deductible things (and non-deductible things).

If they are curious, they can type in three different incomes, even if they aren't planning on submitting the tax form with the wrong amounts. So if their income is $59,000 and their tax bracket is say, 15% for that, instead of say, 24% for 60,000-the next end of that bracket- e.g. $75k or $95k) they might get a much smaller tax return if they type $60,000. But then if they earned a little more, like $61,000, they could type in that and see what their return is, along with the rate.

If it is a gradient with smooth progression for each dollar increase, then they can immediately see how much more they are paying in taxes from 15% to 20%. But in reality, in a smooth/gradient-based progressive tax increase, those amounts would be centered in the middle of those brackets (like 15% would right in the the center between $35,000 and $59,999, or $48,500, and the $59,000 income would be closer to 19.9% and the $61,000 income might be $20.1%.

It wouldn't be considered fraud if they are just determining what they would pay if they earned a little bit more. In fact, if they just discovered an invoice check they received from self-employment, and forgot to report it, they might have to type in different amounts, if they didn't report the right amount the first time. Everyone would pay the same tax rates at each income level (with $1000 intervals, or even $1 intervals.

The system could still be transparent because it can show a chart of the tax rates for each $1,000 increase, even if the tax brackets only provides an estimate for each bracket. I do agree some people can't read charts very well, but if they included 100 thin bars for taxable rates under $100,000, people would be able to see the estimated percentage that they would be paying. It might be 15%, 15.5%, 16%, 16.5%, or 17%, and so on for $48,500. $49,000, $49500, $50,000, and so on, respectively.

The idea with this is that it would disincentivize people from misreporting because if they report earning $500 less, they aren't saving much more money (not to mention illegally)- their tax rate might be 0.1% less, and on a $49500 income that might only be $250 less in taxes over reporting $50000. The risk of getting caught is not to going worth it if this method is in place. (Actually not in any case, but at least they can see it's not going to be a huge decrease in taxable income by reporting a little less, so the only way they can attempt to pay less is by reporting a lot less, and the penalties for that would be larger)

[mmooss]

They may not trust it if they can't understand it.

[encoderer]

You might just be taking people too literally.

I've heard the same thing -- if they take a job they will lose money. What they really mean is that if they take a job (trade time for money), they will lose some of the pension they have already earned. This is a real economic loss (even if they might have a few more bucks at the end of the week) to say nothing of their lost time.

[hsuduebc2]

I have a different take. I think the state wants the system to be this rigid because, paradoxically, that makes it more flexible for them.

For example, they can keep certain tax exemption thresholds low while overall incomes rise. That means more people gradually fall into higher tax brackets or lose exemptions, even though the money they earn is worth less over time.

The rigidity itself is not a bug but a feature. It is a sneaky way to raise the taxes without openly raising taxes. But it's just a theory.