As readers of this blog probably know, Get Rich Slowly is one of the most important and widely read blogs in the personal finance space. Wise Bread ranks it #8. It has more than 81,000 subscribers and a Google PageRank of 5. (That’s good, trust me.)
Early yesterday morning it posted a guest post from CJ at WiseMoneyMatters entitled “Why You Shouldn’t Keep a Mortgage Just for the Tax Deduction.” It is not, to say the least, a work of great insight. Filled with breathless explanations of the painfully obvious, it contains such gems as an explanation that a tax deduction reduces your taxable income not the taxes you pay. And it makes some remarkably unfounded generalizations, such as that the reader is unlikely to itemize deductions in the absence of mortgage interest.
But what made the post worth discussing here is something that it lacked, or at least lacked by the time I read it yesterday evening. Apparently, as originally posted the piece contained an “offending section” that betrayed a fundamental lack of understanding of how income taxes work, specifically the difference between marginal and average tax rates.
We can only infer from the comments and apologia from Get Rich Slowly’s main author, J.D., what was in the offending section, because J.D. deleted it. (Which, as even newbie bloggers know, is bad form. Usual practice is to strike text out [and if necessary make clarifications inside brackets.]) We are left to assume it was really embarrassingly wrong.
[Speaking of brackets, since the post went up I have learned (see comments) that the section deleted was rather long so using strike through would have been both pointless and goofy. I apologize.]
The situation was not helped by the post’s author, CJ, making an apologetic comment just after 6am (PT).
As a few people have pointed out, there is a mistake with the marginal tax rate. I’m not an accountant so this post (as with every post I put on my site) is simply me learning personal finance and putting it on paper. I actually only learned about how the marginal tax brackets work a few days ago while listening to Dave Ramsey. Well after I had submitted the article.
CJ’s site, WiseMoneyMatters, although not nearly in the same league as Get Rich Slowly, is a reasonably successful blog with a PageRank of 3. If it was on the WiseBread list I estimate it would come in at #166. So even without the megaphone of Get Rich Slowly, CJ has a significant number of readers of his own. Do they realize that he is making this up as he goes along?
For his part, J.D. has apologized and admitted great embarrassment. He has also gone to pains to make the case that the tax bracket thing confuses lots of people, posting an explanation of it this morning. That post implies that J.D. himself only came to understand the material recently, something of which I am doubtful.
I have trouble relating to this. I understood tax brackets in grade school. To me, how income taxes work is just a basic part of modern life, like driving on the right side of the road. Then again, being a cynic, I am ready to believe that there are millions of people out there who do not understand it. But none of them have any business writing personal finance blogs.
Bad Money Advice, by the way, has a PageRank of 0. I’m working on it.