There aren't many Americans anywhere close to a 40-50% effective tax rate.

AlbertCory · on March 25, 2023

California is easily close to that, when you add up Federal and State income taxes. As is New York.

Just look at the continued campaign to remove the $10,000 limit on State and Local Taxes. Where's that coming from?

ceejayoz · on March 25, 2023

> California is easily close to that, when you add up Federal and State income taxes. As is New York.

No, it's not. Someone making $250k in California pays an effective Federal rate of 22% and state of 8%. Even someone making a million a year sees an effective rate of ~42%. (And that's before tax avoidance strategies they'll undoubtedly pursue.)

https://www.forbes.com/advisor/income-tax-calculator/califor...

Same thing for New York; $100k income nets out at a 20% effective rate. https://www.forbes.com/advisor/income-tax-calculator/new-yor...

(And these are single-filers. If you've got a family, it dips substantially further.)

> Just look at the continued campaign to remove the $10,000 limit on State and Local Taxes. Where's that coming from?

The $10k limit isn't a limit on taxes, it's on how much state/local tax paid you can deduct, set in 2017 as a way to punish high-tax blue states. https://en.wikipedia.org/wiki/Tax_Cuts_and_Jobs_Act_of_2017

AlbertCory · on March 25, 2023

> The $10k limit isn't a limit on taxes

Pedantic. Obviously that's what I meant (and knew)

Learn about marginal tax rates. See, Forbes even tells you: "your marginal tax rate is 35%"

22% is the average tax rate. It's the *marginal" tax rate we're concerned with for deductions.