Talking to a friend who works for a small plumbing company (25-35 employees total). They were, of course, late on his annual review (and conveniently, his annual raise). He had the meeting last week and got a .75% increase.
He was obviously pissed. His boss then told him that he was really doing him a favor because he knows how much he makes and if he gave him a bigger raise he'd just barely bump into a higher tax bracket and actually lose money. The guy has a wife who works full time, and he has no idea what tax bracket he is actually in.
Edit: Didn't even think about the marginal brackets. Yea, only the income above the cutoff is taxed at a higher rate. This dude sucks even more.