[hervature]

The USA, the second highest bracket for federal (greater than $160,000) is 32%, then you have the 15.3% self-employment tax (social security + medicare), that alone is 47.3%. The minimum state income tax in most states will push you over 50%, but at $160,000 in California, that would be an additional 9.3%, so 56.3% total. Of course, we're ignoring credits but I assume $160,000 for a contractor in SF is pretty regular.

[boulos]

Fwiw, those are marginal rates and you deduct the “employer half” of self-employment taxes.

So a (filing single) contractor making 160,000 in California would pay more like $60k in total taxes (which is still 37.5% effective).

But given the number of UK folks for this topic, the “Social Security” and FICA amount (~15%, so nearly half of “tax”) is effectively similar to National Insurance.

[hervature]

Sorry, I thought I put marginal in there (that's why I mentioned brackets). There was lots of stuff I omitted like the SALT deduction. But I lumped all that stuff into "credits". For those reading, if you are paying 50% in tax in the US, you're probably doing something wrong even if all the marginal rates add up to that.

[jfengel]

Note that over $137,700 you stop paying that 15.3% self employment tax. So you never really pay that maximum combined rate.