3 ms·
A large number of people don't even know how tax brackets work (hence some people thinking that if they get a raise they'll lose money). Basic financial litera
by BaseballPhysics 4y ago
A large number of people don't even know how tax brackets work (hence some people thinking that if they get a raise they'll lose money). Basic financial literacy is not as common as you seem to think.
- rurp 4y agoSimilar to this, federal tax withholding is poorly understand by many people. A lot of people want to give the govt an interest free loan every year and don't understand why anyone wouldn't.
- BaseballPhysics 4y agoAbsolutely. I recently explained this to my retiree mother-in-law who was overpaying taxes each year for fear that she'd owe money at the end of the tax year, forgetting that every dollar she overpays is another dollar she's drawing down from her saving that isn't earning (modest) interest. Not that I can claim I'm being any smarter. I really should instruct my employer to reduce my tax withholdings, as I'm saving into a tax advantaged account to which contributions result in an income deduction. Every dollar I get at the end of the tax year in a refund is a dollar I'm not saving during the year (thus losing out on some long-term gains). But at least I know better. ;)