Thursday, September 8, 2011
Laura Laing is the author of a book called Math For Grownups. Gregory Connolly is an ostensibly grown-up journalist, tasked by USA Today to summarize some "tips" from Laing's book. In his summary, Connolly gets one thing very wrong:That raise actually might not be as good as it looks. The extra money is nice, but it could very well bump you into the next tax bracket, possibly leaving you with less money than you had before the raise. Better benefits, such as medical, can save you money while keeping you in the same tax bracket.
Gads. We need a remedial lesson in what "marginal tax rates" are. ... [T]he failure to understand the nature of marginal tax rates is something that occurs far too often in lay journalism, to the extent that you do, from time to time, encounter stories about people artificially restraining their own income out of terror that they'll end up on the losing end of a tax rate deal.
(Hat Tip: Josh Blank, Francine Lipman.)