4 ms·

> I have to pay 40% of my income as income tax. So do all the engineers, PMs, etc working at Microsoft.

• KMag 5y ago
  All of the MS engineers in the U.S. have an effective income tax rate of 40%, not a marginal tax rate of 40%? Assuming Washington State takes about 10% marginal tax... that's about half their income coming in above the 32% federal tax bracket which starts at $163k. Is a starting salary for an engineer at Microsoft really around $320,000/yr.? If they're really pulling in that, one would hope they'd have some long-term capital gains, which would further pull down their effective income tax rate.
  • maccard 5y ago
    Very few people _anywhere_ are paying a 40% effective tax rate. I wasn't aware of the Washington state tax rate though.
    • KMag 5y ago
      I'm not sure what it is in Washington. In New York 10 years ago, my marginal tax rate to the state was around 10%.
• seanmcdirmid 5y ago
  Many of those are in Washington state, which doesn’t have an income tax. It is almost impossible to get to 40% with federal income taxes and payroll alone. They are probably maxing out their 401k as well as various other pre tax contributions that can be made.
  • maccard 5y ago
    I didn't know Washington state had no income tax! If you count 401k/marriage allowances, personal allowances etc, then there are very very few people anywhere paying 40% income tax. In Ireland, you're not paying 40% until you make 120k which is a very small amount of people.