Top marginal tax rate in US now ~65%

[dannubis]

You dream of only having 35% of your income for your own use?

Marginal income, if you are being intellectually honest.

[Dauphin]

Nope. Also no lower limit below which you don't pay it. It's one of the government's biggest earners.

It drops from 12 to 2 per cent at around the 45k mark. And the lower limit is the same as the personal allowance (allocated weekly,fortnightly or monthly). Or are you talking about something else?

[kentonio]

I truly don't understand what point you're trying to make here.

How about the point that if you can save a years income in just three years while simultaneously living a wealthy lifestyle, that you have no real ground to stand on when you start *****ing about your taxes going up slightly?

[Ben Kenobi]

See? You validated my point; even with the taxes you have to pay, you're doing great. With a much higher income I would be doing the same.

The irony is that Fun wants to ensure he remains poor.

[MikeH]

Is there a ceiling on the income taxable for national insurance? In the US only the first $110,000 is taxable for social security and medicare.

Nope. Also no lower limit below which you don't pay it. It's one of the government's biggest earners.

[Jaguar]

Son, what didn't you understand about my earlier response to you?

What earlier response? Or are you talking to someone else?

[KrazyHorse]

See? You validated my point; even with the taxes you have to pay, you're doing great. With a much higher income I would be doing the same.

Fact is, for the upper middle class and the wealthy, after paying 35 - 50 percent in taxes, they still have more than enough to save for retirement after all their other expenses.

I truly don't understand what point you're trying to make here.

[KrazyHorse]

Son, what didn't you understand about my earlier response to you?

[Jaguar]

Multiple people in this thread have confused marginal and effective tax rates...

Did you expect better?

[MrFun]

Save it for retirement, duh.

My nest egg is nearing 100% of my annual income. Not bad for having started work 3 years ago and getting raped on taxes.

See? You validated my point; even with the taxes you have to pay, you're doing great. With a much higher income I would be doing the same.

Fact is, for the upper middle class and the wealthy, after paying 35 - 50 percent in taxes, they still have more than enough to save for retirement after all their other expenses.

[KrazyHorse]

With a high income like that, I would not know what to do with all my money after I pay 35 - 50 percent. I'd be a happy camper.

Save it for retirement, duh.

My nest egg is nearing 100% of my annual income. Not bad for having started work 3 years ago and getting raped on taxes.

[KrazyHorse]

No one should pay more than one third of their income in taxes. More than 33% and the State is robbing you.

I was at around 43% effective tax rate last year (2011). Probably closer to 38% this year (2012) and 40-41% for 2013.

Edit: numbers based around the following simplifying assumptions

Count federal, state and local income tax
Count payroll taxes on both sides (employer and employee)
Do not count imputed future taxes on max contribution to 401k and employer contributions
As income do not count contributions to 401k and employer contributions
Count as income employer side of payroll taxes
Count as income capital losses realized for tax purposes
Do not count as income unrealized capital gains
Do count as income dividends

[KrazyHorse]

That is only true above a certain level though.

I agree, and that level is likely near 60ish percent in the short run. Probably a bit lower in the long run.

[KrazyHorse]

35% + 10% + 3.8% = >65%?
please elaborate for clueless european.

Various phaseouts of tax deductions that all hit in the same region

[KrazyHorse]

Multiple people in this thread have confused marginal and effective tax rates...