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You are exaggerating NYC income taxes. At $200k, your effective income tax rate if you file single, including FICA, is 33%, not 40% [0]. Heck, your marginal ta

You are exaggerating NYC income taxes. At $200k, your effective income tax rate if you file single, including FICA, is 33%, not 40% [0]. Heck, your marginal tax rate isn't even 40%, and all those numbers are without taking a 401k tax deduction. People get this crazy idea that $200k isn't rich in NYC or SF. It is very, very rich, even for the area. COL adjustment for rent and groceries shaves off $15-30k, but it doesn't keep scaling up from there. [0] https://smartasset.com/taxes/new-york-tax-calculator https://smartasset.com/taxes/new-york-tax-calculator

winter_blue 10y ago
> Heck, your marginal tax rate isn't even 40% That's wrong. The marginal tax for even a $50,000/year earner in NYC is over 42%. Source: http://arjun-menon.github.io/taxes-in-nyc/?income=50,000 http://arjun-menon.github.io/taxes-in-nyc/?income=50,000
- mercutio2 10y ago
  There's actually no contradiction. Marginal tax rates go down 6.2% at 118,500 when social security cuts out, and they only go up about 3% from there to 200k. It's kind of outrageous, marginal tax rates going down for high earners, but there we are. But thanks for pointing out that I had the wrong zip code, so I missed NYC income tax, which is 3.65% marginal, bringing average tax rates at 200k to 36%, not 33% (albeit with zero deductions and exemptions, which obviously isn't reasonable, you'll deduct state income tax at the very least and shave off 1.4% immediately). Your link is in error, it treats Social Security tax as continuing past $118k.
  - winter_blue 10y ago
    > Your link is in error, it treats Social Security tax as continuing past $118k. Actually, the tool does stop adding Social Security after the income limit: http://arjun-menon.github.io/taxes-in-nyc/?income=200,000 http://arjun-menon.github.io/taxes-in-nyc/?income=200,000 > you'll deduct state income tax at the very least The tool also factors in state income tax deductions. You'll see it deducted in the link above The tool reports the marginal tax rate for a $200,000 earner as ~36%. -- But yea, you're right, it sucks that $50k earners are taxed even more % than $200k earners. The employer pays payroll taxes of 7.65% (6.2% + 1.45%), so actual marginal taxes are ~50% from an employer cost perspective. It's truly insane.
deleted 10y ago
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winter_blue 10y ago

> Heck, your marginal tax rate isn't even 40% That's wrong. The marginal tax for even a $50,000/year earner in NYC is over 42%. Source: http://arjun-menon.github.io/taxes-in-nyc/?income=50,000 http://arjun-menon.github.io/taxes-in-nyc/?income=50,000

mercutio2 10y ago
There's actually no contradiction. Marginal tax rates go down 6.2% at 118,500 when social security cuts out, and they only go up about 3% from there to 200k. It's kind of outrageous, marginal tax rates going down for high earners, but there we are. But thanks for pointing out that I had the wrong zip code, so I missed NYC income tax, which is 3.65% marginal, bringing average tax rates at 200k to 36%, not 33% (albeit with zero deductions and exemptions, which obviously isn't reasonable, you'll deduct state income tax at the very least and shave off 1.4% immediately). Your link is in error, it treats Social Security tax as continuing past $118k.
- winter_blue 10y ago
  > Your link is in error, it treats Social Security tax as continuing past $118k. Actually, the tool does stop adding Social Security after the income limit: http://arjun-menon.github.io/taxes-in-nyc/?income=200,000 http://arjun-menon.github.io/taxes-in-nyc/?income=200,000 > you'll deduct state income tax at the very least The tool also factors in state income tax deductions. You'll see it deducted in the link above The tool reports the marginal tax rate for a $200,000 earner as ~36%. -- But yea, you're right, it sucks that $50k earners are taxed even more % than $200k earners. The employer pays payroll taxes of 7.65% (6.2% + 1.45%), so actual marginal taxes are ~50% from an employer cost perspective. It's truly insane.

deleted 10y ago

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