|
|
|
|
|
|
by exelius
3294 days ago
|
|
|
If you're in a marriage with two high earners (lets say > $500k household gross) then most of your income is being taxed at the highest (or close to highest) marginal rate. You also don't qualify for a bunch of deductions (student loan tax breaks are only for people under a certain income, you can only deduct medical expenses over 10% of household gross, etc). You also don't always get to claim the full amount of your deduction from local/state taxes thanks to the way AMT is calculated. If you earn much more than that, generally companies find other ways to pay you (equity, deferred compensation, etc.) that have more administrative overhead, but less of a tax hit. And yes, FICA is definitely a tax. A regressive one since the rate goes down the higher your income is, but it's still a tax. |
|
|
Well yes, if you are in the top 1% of wage earners in the US your effective tax rate is going to be pretty high. In fact, you'll pay around $200,000 in taxes on that, give or take (if you live in a high-tax state like California). But that's literally affecting 1% of the population, and they're probably doing ok.
> If you earn much more than that, generally companies find other ways to pay you
Most companies give equity in the form of RSU's rather than options, so income taxes hit immediately upon vesting.
> And yes, FICA is definitely a tax.
Yes they are a payroll tax, but just "adding" them into your income taxes is extremely misleading. Income tax is just that. FICA is a payroll tax.