If a person is married with two children, the weekly deductions on a $500,000 salary are: federal taxes, $2,645; Social Security, $596; Medicare, $139; state taxes, $682; and city, $372, bringing the weekly take-home to $5,180, or about $269,000 a year, said Martin Cohen, a Manhattan accountant.
Martin needs to check his figures. Social security, for example, is 6.2% for the first 106k of income, which is a weekly deduction of about $127, not $596. This is a difference of almost $25k / year.
It's also highly unlikely that a person in this scenario wouldn't have a range of tax mitigation strategies, from retirement investments to real estate.
EDIT: Here's another one:
The total costs here...are $790,750, which would require about a $1.6-million salary to compensate for taxes.
By and large, people making millions of dollars per year in income do not end up paying effective tax rates of greater than 50%. The highest marginal tax rate is currently 35%, so even once you account for SS/Medicare, city, and state taxes, you're still not above 50%, especially once all deductions are taken into account. Additionally, many of these folks are probably subject to AMT, which is a flat rate of 26-28%.
Actually he is fine with incentive based compensation, but the government needs to be paid back before they can collect the incentive's. What he is trying to avoid is news story's where the government lost money and the bankers got million+ dollar compensation.
I assume they're counting New York city and State taxes, which add up to a little over 10%, iirc. However, you're right that, with the help of a decent accountant, they can get out of paying the full tax rate normal people pay.
Martin needs to check his figures. Social security, for example, is 6.2% for the first 106k of income, which is a weekly deduction of about $127, not $596. This is a difference of almost $25k / year.
It's also highly unlikely that a person in this scenario wouldn't have a range of tax mitigation strategies, from retirement investments to real estate.
EDIT: Here's another one:
The total costs here...are $790,750, which would require about a $1.6-million salary to compensate for taxes.
By and large, people making millions of dollars per year in income do not end up paying effective tax rates of greater than 50%. The highest marginal tax rate is currently 35%, so even once you account for SS/Medicare, city, and state taxes, you're still not above 50%, especially once all deductions are taken into account. Additionally, many of these folks are probably subject to AMT, which is a flat rate of 26-28%.