$200k in Federal taxes on $500k of W-2 income (i.e. a federal tax rate of 40%) is significantly higher than the reality. With no deductions, it's closer to $13

$200k in Federal taxes on $500k of W-2 income (i.e. a federal tax rate of 40%) is significantly higher than the reality. With no deductions, it's closer to $135k (24% tax rate). The marginal tax rate on 500k of income is only 35% (plus FICA, but that's 2.4%). $45k in state (i.e. CA) taxes is about right. Source: https://smartasset.com/taxes/income-taxes#ntLwScKyxG https://smartasset.com/taxes/income-taxes#ntLwScKyxG