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So much money. Do people really need to be paid that much?!
by xulith 10y ago
So much money. Do people really need to be paid that much?!
- qihqi 10y agohalf of those go to tax.
- mercutio2 10y agoThis is a common fallacy. Even for a married couple earning 500k in high-income-tax California, effective tax rate (as opposed to marginal tax rate) is only 30-35%, and that includes the employee portion of Medicare/social security (the latter of which cuts out around 110k). The exact effective tax rate will vary mostly with your mortgage interest deduction.
- donretag 10y ago"The exact effective tax rate will vary mostly with your mortgage interest deduction." Massive assumption you are making regarding home ownership.
- pyrrhotech 10y agoquick calculation comes to about a 45% tax rate for single in CA and 42.4% for married. So 50% is a small exaggeration, but it's definitely closer to reality than 30-35% underestimate.
- dsp1234 10y agoNote that these numbers are likely the marginal tax rate, the tax rate that the very last dollar was taxed at. However, all of the income is not taxed at that rate. That is why the commenter above mentioned effective tax rate, which is the calculation of (total tax paid / total income).
- minwcnt5 10y agoAll of those numbers seem wrong. My effective tax rate in CA was around 38% for 2015. 30-35% is too low for $500k.
- tamana 10y agoWhy would you guess when someone told you they calculated? For marroed filing jointly earning $450k, the marginal rate is 35% federal plus 2.35% Medicare tax plus 9.3% CA tax. 5% higher for $500k