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>You’re paying almost 50% around high six figure range. That's a gross oversimplification and thus very misleading. While your marginal tax rate on taxable inc
by PopAlongKid 3y ago
>You’re paying almost 50% around high six figure range.
That's a gross oversimplification and thus very misleading. While your marginal tax rate on taxable income (not gross income) might be close to 50%, if you are married filing joint, a homeowner, and have children, you are not paying anywhere near 50% effective tax rate[0] on your total income, due to deductions and exemptions, credits, tax-deferred retirement contributions, tax-free health insurance, and progressive tax brackets.
[0] "effective tax rate" does not have a universally agreed single definition, but the statement holds for most reasonable definitions.
- eldavido 3y agoNot really. 20-30% effective on income including CA's 9.4% at ~40k, plus 10-20k in property taxes, 10%+ in sales taxes, excise taxes on everything from gasoline to alcohol, and various "fees" that are really taxes including auto registration, building permit fees, DMV charges, ride share fees, motor oil and battery disposal charges. Also, some cities (e.g. NYC) have a personal income tax. Obviously you're right that marginal != effective, but Americans really do pay a LOT in taxes, when you add it up, for a relatively middling level of services (e.g. no public healthcare, no subsidized daycares, marginal-quality public schools)
- 0xBDB 3y agoDepends on your definition of "mid six figures" and your source, but it at least doesn't appear very misleading. At $450k it looks like the federal effective tax burden is 35% and the New York tax burden is at least ~16% (the data are not broken out by income). https://smartasset.com/taxes/income-taxes https://smartasset.com/taxes/income-taxes https://taxfoundation.org/data/all/state/tax-burden-by-state-2022/ https://taxfoundation.org/data/all/state/tax-burden-by-state...