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Tax Brackets. "I got a pay raise and will now be taxed more and make less money than before the raise"
If <=30k was taxed at 25% and 30+k taxed at 30% and you go from 30k to 31k a year, only the 1k is taxed at the higher rate.
Is this really a common misconception?
Yes, unfortunately.
Benefit cliffs do exist however.
I get that this might not be super intuitive. but how can one not notice that this is untrue? don't people check their accounts and see that there is still more coming in and not less? just not as much as one might want, but still.
You assume people look at their accounts and do some form of account keeping?