[sklnd]

The key to taxes in the United States is that they are broken up into a large number of categories. 20% sounds about right for "Federal Income Tax", but that's only counting the largest tax of 4 or 5 taxes levied directly on salary.

At that income level (around 100k/yr), the tax federal taxes reported to you on your last pay stub of the year should be around 28%, when you count FICA (6.2%) and Medicare (1.45%). Add to that whatever your state income tax is (most states have an income tax). As an example, I have to pay 4.63% to the state of Colorado. I think most states that impose an income tax are within a few percent of that. Then add the hidden employer side of payroll tax (another 6.2%), and you end up with a figure that is close to 40% of income.

Minimum standard deduction and a single personal exemption will remove a few percent from this figure at filing time, and you can delay tax payment through 401(k) contribution, but it is still a very heavy tax rate. It is just well hidden from the average income earner by putting the taxes into a number of buckets.

[tptacek]

I'm a little uncomfortable talking in specifics here, but I'm not close to 50% effective tax. IL's state income tax is 2 points lower than VA's (or was until recently) but that's 2 points.

20% sounds low to me too (makes me wonder whether he missed FICA), but add all them together and you're still not giving half your money away.