> A high income American that makes money as ordinary income (rather than capital gains) and does not own a house and lives in a high tax city will pay almost 50% if you factor in federal, state, healthcare, and sales tax.
You have just described a typical Hacker News reader, who lives in, say, San Francisco, has relatively high income, and pays rent.
But if you're a married couple in Georgia with a mortgage and a kid, making $90k total, tax withholding takes out 23% from your paycheck, with the 4% sales tax rate taking out maybe another 1-2% because most of your expenses (e.g. mortgage, services, and food) aren't subject to sales tax.
The U.S. is unusual among western countries in how little it taxes the middle class.
Not when you compute actual tax rate as opposed to marginal. For example a single person in SF making $250,000 a year will pay 35-40% of her income to taxes, depending on how much sales tax she pays. [1]
That's assuming she does not contribute to a 401k, make charitable donations, or take advantage of any other tax incentives.
Right. You have to be making about $700k as a single person (almost a million as a married couple) in ordinary income in San Francisco before you exceed 45% total tax burden. Many people who make that much money will not pay that much in taxes because their compensation will come from capital gains (e.g. VCs earning carried interest capital gains).
You have just described a typical Hacker News reader, who lives in, say, San Francisco, has relatively high income, and pays rent.