Tuesday, November 20, 2012

Innumerate Rich People Who Don't Know How Tax Rates Work Puzzle Us All

You see these idiots every time a tax hike becomes possible again. They have no apparent idea how marginal rates work. Right now, if her and her husband make $250,000, they pay at most a 33% tax on some of that income. If they made $251,000, they would have to pay the same rates for everything except that last $1000 -- that, they'd be taxed at 35%. If the rates increase across the board that top rate becomes 39.6%. 
How do people still not understand that, and how does it color the debate over taxes?
I found the above cartoon with a quick google image search; on the same results page, I found another that complained about marginal taxes and gave the ignoramus reason that earning into the next income bracket resulted in all income being taxed at the higher rate.

My last post praised editorial cartoonists for highlighting idiocy in an accessible way ... I guess I should have pointed out that only the cartoonists willing to talk about reality, and with a commitment to the truth, have merit.

1 comment:

  1. Rachel Maddow had a story about this last night.

    About lawyers and accountants and various kings of finance who don't realize that only the dollars OVER a certain amount will be taxed at the higher rate.

    These folks somehow never learned about marginal vs. effective tax rates!


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