I was having a discussion with a client regarding tax rates. I was sharing the limits for the top 10% of the US about $115,000 in Adjusted Gross Income (AGI).
As the conversation went on we discussed the amount of taxes a couple pays. So we did a quick calculation with $75,000 (W-2 of $37,500 each only) of AGI, and no itemization. After the standard deduction of $11,400 and the exemptions of $3,650 for two of them; the federal income tax was $7,634, the state income tax was $3,550 and FICA was $5,737.50 (no reduced rates included).
So the total income and payroll taxes were $16,921.50 (22.56%) for $75,000 of AGI. Over one fifth but not quite a quarter of their income would go for taxes. Luckily there are no kids and they rent and don’t own. Just car payments, food, rent and utilities. Seems a fair share to go to government; especially since its not my money. For my money the rate would seem too high.
Also this does not count sales taxes.