Financial Myths: Making More Money Could Mean Taking Home Less Money

Our final entry in the Financial Myths series is about taxes. Have you ever heard a version of this? “If you get a raise you’ll be in a higher tax bracket and have to pay so much more in taxes that you’ll end up actually making less than before the raise.” This idea just won’t go away, but it definitely isn’t true. The misunderstanding is probably due to not understanding what “marginal tax rates” are and how they actually work. If you could use a refresher on that, or want a full explanation of exactly why this myth isn’t true you can get the full story here.