“Moving up” in a tax bracket never means earning less in nominal or in real terms. It just means you get less in your pocket of the extra you earned, not of the total you earned.
0 - theguardian.com/money/2014/jul/20/benefits-cliff-minimum-wage-increase-backfire-poverty
If you make $41k, you still pay 10% on your first ~$10k, 12% on the next ~$30k, and 22% only on that last $1k.
So yes, you could be in a situation where you had been at the top of a bracket, and your incremental wages from the raise are taxed at the next bracket's rate. But it doesn't trigger any kind of situation where your entire salary is now charged at the higher rate.
Yes, of course, a 5% raise does not compensate for 5% inflation. But that's just because taxes exist, not because you are entering a higher bracket per se.
IMO, the whole pervasive narrative around tax brackets being something to fear is a fear-uncertainty-and-doubt move by those seeking to vilify the tax system. It's worked surprisingly well to those ends.
To simplify 100k split 50k @20%, 50k @ 40% is less than (105k split 50k @20%, 55k @40%) / 1.05
The fist is worth 50 * 0.8 + 50 * 0.6 = 70k, the second is worth (50 * 0.8 + 55 * 0.6)/ 1.05 = 69.52k.
It's still very misleading to say "wage gains aren't good" though - the problem is not that you got a 5% raise, it's that inflation is 5% so you need a slightly-higher-than-inflation raise to keep up. If you didn't get a 5% raise you'd just be even worse off.
Do some lawmakers only support a law because it will have a lower (min. wage) or higher (tax) real monetary significance in the future?
There are a few edge cases where these can be technically true but they are rare and limited in scope and magnitude.
I'm not sure how else to read that. If you make more money, you can buy more things. Even if you go up a tax bracket. If you make twice as much money and that moves you up a tax bracket, you won't be able to buy twice as many things, but you can still by more things than you could when you made half as much. Maybe 1.8 times more things.
