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How is your effective tax rate 50%? Even if you are in the highest tax bracket, only the income in that bracket is taxed at the highest rate. Even people earnin
by jhall1468 10y ago
How is your effective tax rate 50%? Even if you are in the highest tax bracket, only the income in that bracket is taxed at the highest rate. Even people earning $475000 in California still only have an effective tax rate of ~40%, which is what you'd need to be making to be in the top US+California tax bracket. And if that's the case you are still taking home nearly $300,000 per year.
I'm all for effective use of taxes, but your effective tax rate calculation seems way off.
- deleted 10y ago[deleted]
- withdavidli 10y agoUnless they make ~$5M a year or greater. This calculator shows effective tax rate >50% at that point. https://smartasset.com/taxes/california-tax-calculator#7N9mEql0b4 https://smartasset.com/taxes/california-tax-calculator#7N9mE... Edit: it was 5M not 4M. Calculator shows FICA not maxing out. It'll get closer to 50% the more they make.
- the_economist 10y agoDon't forget about property taxes. It's extraordinarily expensive to buy a home in most parts of California. If the average person buys a home that costs 3x their income, and property taxes are around 1%, that's an extra 3% added to your tax bill.
- rsync 10y ago"I'm all for effective use of taxes, but your effective tax rate calculation seems way off." I apologize for already going beyond the bounds of politeness, as far as discussing finances go - so forgive me for not going into further details ... but my calculation is about right on. "And if that's the case you are still taking home nearly $300,000 per year." That, on the other hand, bothers me greatly - this idea that at some level of income, the proportions stop mattering. The idea that, if one makes X income, it doesn't matter if that was 30 or 50 or 70% of what we made ... "It ought to be enough for you".