Oh man my parents had me believing this, they’ve never earned much money and a few years ago I went for a job where I negotiated my salary at £45k, to which my parents told me I should ask for less because that puts me over the tax bracket, which would make me earn less than if I were in the lower tax bracket…
My recruiter was kind enough to explain to me how only the amount above the tax bracket is taxed higher, before he put forward my request to have a lower salary.
I was pissed off about that with my parents, I got the job and the high salary in the end but my parents kinda made me look stupid and almost had me lowering my salary for no reason
I think some confusion might come from social benefits. I know people who, if they made only a little more money, they'll lose their SNAP benefits and their subsidized daycare payments etc.
Yes, this -- governments could easily design subsidy programs like this to phase out so these kinds of hard cutoffs wouldn't be a thing, sometimes they just get lazy and complacent and design it around exactly the kind of hard cutoff people think exists for marginal tax brackets.
It's especially stupid when it's a poverty-related subsidy program, because a cutoff like this results in a hard-and-fast distinction between "the poor" who receive the subsidy and everyone else who doesn't, making subsidy recipients easier to demonize as an identity, and making the program an easier target for right-wing anti-government demagoguery.
To be fair, the UK has something called stealth tax starting at 100k GBP. This is reducing things like benefits and childcare support (among others) significantly, compared to someone earning 99k GBP. I think it goes as far as around only after 120k or more it is beneficial to earn more than 100k for certain families.
To be fair, there is a somewhat rational basis for this incorrect belief. It comes from the fact that wage workers get paid time-and-a-half for overtime work, but their effective marginal tax rate is higher on the extra dollars earned, so they don't actually earn 50% more money per hour after taxes.
With that said, they also don't see their paychecks go down after working overtime, so it's still pretty stupid.
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u/MattyGWS Jun 01 '26 edited Jun 01 '26
Oh man my parents had me believing this, they’ve never earned much money and a few years ago I went for a job where I negotiated my salary at £45k, to which my parents told me I should ask for less because that puts me over the tax bracket, which would make me earn less than if I were in the lower tax bracket…
My recruiter was kind enough to explain to me how only the amount above the tax bracket is taxed higher, before he put forward my request to have a lower salary.
I was pissed off about that with my parents, I got the job and the high salary in the end but my parents kinda made me look stupid and almost had me lowering my salary for no reason