Nobody Understands How Taxes Work

Moneybox
A blog about business and economics.
July 11 2012 5:27 PM

Nobody Understands How Taxes Work

Here I went and wrote a whole column about House Republicans exploiting public ignorance of how marginal tax rates work to bamboozle people about the impact on small businesses and I read (via Jon Chait) that Democratic Senators don't understand this either:

Geithner tried to assuage concerns by telling Democrats that the president’s plan would ensure that all taxpayers would pay the lower tax rates on their first $250,000 of income — and they would be hit with higher tax rates only for earned income over that threshold, attendees said.

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It's worth keeping in mind that income taxes are probably the single most-discussed policy issue before the congress and gasping in terror at the level of policy knowledge Senators must have of other issues.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.