Top marginal tax rate in US now ~65%

[MichaeltheGreat]

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.

I think the medicare cap is gone.

[MrFun]

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

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.

[DaShi]

I, for one, long to live in a country without a middle class screwing it up.

[Kidlicious]

You still can if you're stupid. There's also phaseouts on the standard deduction and on the lower tiers of rates - that's where the 39.6% rate comes in and then goes out once the phaseout is complete.

The AMT (added) can be substantial in dollars, but not that much in %, can it? I'm thinking 5 or 10% of agi at the most.

[KrazyHorse]

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

[KrazyHorse]

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

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

[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]

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]

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.

[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.

[Jaguar]

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

Did you expect better?

[KrazyHorse]

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

[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.

[Jaguar]

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

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

[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.