Just 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 ex

Just 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.