The grok answer was off the mark. You’re not paying close to those rates at 80k in California. It confuses marginal with effective, doesn’t factor in standard deductions and more.

 

Why even go to work? Why want to even be successful and put the college work in?? To hand over 60%? In California it’s insane to me that with federal and state it’s over 50% of your income going to Uncle Sam,
BUT that’s only the top tax bracket so it doesn’t affect everyone. It’s still ludicrous. More than half your money?

 

I don't pay 50 percent of my income in taxes LoL. Not even near that. That's what tax deductions are for

 

No one has a 60% effective rate. Or even 50%. It's not possible, because of the way tax brackets work.

Federal tax is the same everywhere, and you're not paying more than 37% marginal, and even then only on anything over $650K - so no matter what you earn your effective rate will be (usually considerably) lower.

And even for $1m plus incomes, you're not paying 13% effective at the state level here. You don't get to the top marginal rate until $700K, and the 1% health surcharge only kicks in over $1m.

And that's before you even start to think about tax mitigation.

 

Thanks, I forgot to mention the Effective tax rate, which is 37 percent at the top. If someone is paying over 50 percent taxes, something is not adding up

 

We’re talking about Canada, not California. I just mentioned the high taxes in California. But he was taking about a friend in Toronto.

60%????? I need to read up on Canadian taxation. I just wouldn’t even want to go to college to get a job to work if I’m giving more than half of it away like a hooker to a pimp. 60/40 split pimp’s favor is typical for high end hookers.

 

I know. I’m just saying on paper the top tax brackets including state and federal put you over 50% in California. Just out of principle that is ludicrous. I’m fine with paying taxes but not like that. But I never would be in that bracket out there. TN is just about 49/50 for overall tax burden.

I just go visit the large amount of rich family I have out there in California, and live in Tennessee. At our reunions which are fairly large we are the only ones not from Bay Area/Northern California. All my Great Aunts and Uncles went out there in the 40’s and got really rich when it was easy to do back then with real estate. I’m sort of a California guy by blood haha.

 

understood. It's one of those devil is in the detail things. There's a lot of misinformation out there about taxes, and misunderstandings about both brackets and the difference between effective and marginal are usually at the heart of it.

 

Right, and me saying that “on paper it’s this much%” doesn’t mean they’ll actually pay that percentage or whatever.

I can see why accountants are highly paid, I mean duh but yeah.

 

You don't want to know my effective tax rate lol

 

There are worse things than being in a high tax bracket... like being broke 🤣

 

I mean because its so low!

 

​​​​​​ There is no high income earner (unless they are stupid) that pays 37 percent of their income in taxes. One of my brother in laws who is conservatively worth $20M paid something like 18 percent last year. The deductions are there... you just need the right accountant(s)

 

Thats exactly right. 18%? He needs a better accountant

 

Pass yours on, I'm sure he'll thank you 😀