10 years ago I see alot of folks turning down overtime out of fear of getting to the next tax bracket,but have no problem getting a raise.
does this thinking still exist?
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It is stupid thinking by people who as a rule, do not understand how tax brackets work. If you ask people who say they are avoiding overtime, you will find that they never do their own taxes, and think that they will pay a higher rate on ALL income if they make enough to have their overtime income put them in a higher bracket.
A simplified example: You pay 15% of the first 20,000, and 20% of the amount between $20,000 and $40,000.
So if you make $20,000, you pay $3000. If you make $25,000, you pay 15% of the $20,000, and 20% on the $5000 ($1000), so the total bill is $4,000.
The net result is you make $20,000, and you keep $17000. You make $25,000 and you keep $21,000. (not $20,000). It is clearly worthwhile to earn overtime, all other things being equal.
What a lot of people think, however is that they will have to pay 20% on the entire $25,000, or $5000, so they avoid making that $5000 in overtime, because they simply do not understand.
The problem occurs when the deductions on overtime pay are inadequate or nil, and the poor schmuck has to pay more in taxes rather than getting a small refund.
There are a lot of people who do not understand percentages. Add the concept of brackets to it and they are utterly baffled.
I spent almost as much office time when I was teaching telling how to figure grades to students than teaching Spanish.
I imagine a good place to look for such people would be on Friday, in line to purchase Powerball tickets.
The lottery is basically a voluntary tax on people who do not understand math.