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by zamnos 1171 days ago
At the risk of revealing which class I find myself in thanks to an unnamed startup, my most recent transaction had:

    Federal Withholding   37.00%
    California State Tax  10.23%
    Medicare               2.25%
    OASDI                  0.50%
    California VDI         0.07%
taken out for taxes, for a total of 50.05%
1 comments
mcny 1171 days ago
The problem isn’t that you are paying too much in taxes. Your taxes are fine. The problem is the super wealthy aren’t paying their share of taxes. Don’t get mad at me. Get mad at the top 0.01% and their cronies. Look at how carried interest died again in Congress.

Also, we can and should fix the tax system so any state income tax you pay reduces your federal income tax bill. So for example, in your case, the ten percent or so that you pay to California (or the flat four percent in case of Colorado) gets effectively paid back to you by the federal government (even if you choose standard deduction). This would immediately give you a little breathing room. This would also encourage states from artificially keeping their income tax low.

Ideally I’d like to see an end to all credits, deductions, and exemptions but I don’t see it happening so this is pretty much the best I can think of…

That and either California needs to repeal the idiotic prop 13 from 1978 that from what I understand keeps property taxes artificially low or we need to enact a federal property tax of about 7% (and effectively exempt the equivalent of a national median two bedroom unit per owner/co-owner). That’s a conversation for another day. For now let’s focus on federal income tax.

I don’t know how to solve this wealth tax problem.

Since you shared your withholding, let me share a metric that everyone in the US can agree on:

Divide line 24 by line 1a (not line 9!!!) and multiply it by 100. Forget about all the other things you pay. We paid under 16 percent in 2022 and under 22 percent in 2021. Do not include Medicare. Do not include state taxes. Just do plain simple math with the FIT. (You don’t need to share the final number here. It is just for you.)

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