5 ms·
Yeah, the numbers are extremely sloppy. Even for the basics, like coming up with the marginal tax rate in NY, he uses the top federal, state, and city income ta
by jonas21 4y ago
Yeah, the numbers are extremely sloppy. Even for the basics, like coming up with the marginal tax rate in NY, he uses the top federal, state, and city income tax rates and adds the social security tax to that.
But the top federal tax bracket starts at $540k and the Social Security tax cuts out at $142k, so if you're paying one on marginal income, you're not paying the other.
- pwinnski 4y agoThat's not just sloppy, it's incorrect! The top-line claim of the author is flat-out demonstrably wrong.
- mister_tee 4y agoI agree they shouldn't have put the 53% marginal claim right next to the social security point, as the max-marginal people will be well past the cap, but the 53% max marginal rate might still be true? 37% federal + 1.45% FICA (medicare) + 0.9% medicare surtax + 10.3% NY state + 3.8% NYC = 53.4+% but I don't work in NYC.
- the-rc 4y agoBTW, between $1M and $1.1M, NYS tax rates switch to flat, not marginal, and apply to the entire income.
- rmk 4y agoHe does use or mention a lower effective tax rate. Even though he points out a 53% on-paper tax rate, he mentions 42% as the effective tax rate in the next paragraph. This does seem closer to the truth. He also specifically says that case-by-case numbers are more complicated and vary, so it's not fair to argue that the numbers are extremely sloppy. He has made an attempt to use well-researched average numbers that appear to rely on actual rates people pay, not the theoretical marginal rates. Mentioning the marginal rates is a rhetorical device he uses, not the rate he uses to illustrate the scenarios.