5 ms·
Doesn't feel like residents of California are getting a value for the % of tax that we pay overall. If you are self-employed and make say 150K you are going to
by bubbleRefuge 14y ago
Doesn't feel like residents of California are getting a value for the % of tax that we pay overall. If you are self-employed and make say 150K you are going to be paying around 35% fed + 6% SS employee + 6% SS employer side + 9% Califonia. total = 55%. ( Granted the taxes are applied on a graduated basis so the effective tax rate would be less.) In Europe, they pay on the order of 50% with free healthcare and a great transportation system. In the bay area, we get charged higher insurance rates based on the zip code with live and we get to drive on 101.
- jamesaguilar 14y agoI'm sorry what? 35% federal income taxes on earnings of 150k? No. Over $85,650 but not over $178,650 -> $17,442.50 plus 28% of the excess over $85,650 Total federal payment: 17.4 + .28(150-85) = 35.6 35.6 over 150 = .23, and that's before factoring in the deduction you get to take for your California payment, or the standard deduction if you choose not to itemize.
- stevenwei 14y agoJust crunched the numbers to see what the effective rate actually is. Assuming self-employed and single in California for 2012, with standard deduction and 1 exemption, your taxable income on $150,000 total income is $131,416, and your federal income tax is: $30,257. Your self-employment tax is: $15,468. Your state income tax is: $10,373. Total effective tax rate is: 37.4% A bit higher than I thought it would be overall, but not quite close to 55%. Of course, if you're at that level of income you should probably set up an S-corp to save on SE tax and dump some money into a 401(k) to further reduce your taxable income.