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> Meanwhile, a 20-something engineer at a six-figure salary can tell you how much of that they get to keep. (hint about half here in California) This is patent
by danans 6y ago
> Meanwhile, a 20-something engineer at a six-figure salary can tell you how much of that they get to keep. (hint about half here in California)
This is patently false. Before even counting any deductions a married couple with a joint income of $300k in CA pays an effective income tax rate (Fed,State,Local) of 29%. Single at the same income pay 38%.
Once you add 401k contributions and the variety of pretax spending benefits, it goes even lower.
Go ahead and model it:
https://smartasset.com/taxes/california-tax-calculator https://smartasset.com/taxes/california-tax-calculator
You have to be earning $3 million a year before you hit an effective tax rate of 50%.
People making that kind of money and more in SV aren't usually making it via regular income but rather via tax minimizing deferred compensation plans taxed at much lower rates.
- xhkkffbf 6y agoYes, but what about sales tax (close to 10% in Cali), gas tax (68 cents per gallon), property tax (either directly or through rent) etc etc.
- anonuser123456 6y ago12.5% payroll tax as well. Also, about half of your medical plan (which is compensation), is a hidden tax (e.g. cross subsidy).
- danans 6y agoPayroll taxes (FICA) are included in the effective tax rates I quoted, and furthermore are split between the employer and employee. The employee portion for 300k income is 4.6%
- sokoloff 6y agoWho hands over the money is not relevant, IMO. If we made the entire payment “come from the employee” or “come from the employer”, it’s still logically coming out of the employee’s pay.
- anonuser123456 6y agoThis is the opinion of most economists.
- justchilly 6y agoEverything else aside, the OP didn't say they were married. That brings the rate a lot closer to what OP said than 29%.
- danans 6y ago38% is very far from 50%, and to characterize the two as the same or similar does a disservice to any discussion regarding tax rates.