Hacker Newsnew | past | comments | ask | show | jobs | submitlogin

A single W-2 earner making $1 million has a 33.49% effective federal tax rate (OASDI, Medicare, Income) taking only the standard deductible and doing nothing else to lower their taxable income (no tax advantaged accounts, not spending enough in categories that allow itemization, etc.). A single non-W-2 earner (has to pay the employer part of payroll taxes) has an effective rate of 34.84%.

If they're married the rates are 29.62% (W-2) and 30.97% (non-W-2), under the same assumption that they do not do anything to qualify for either reduced taxable income or any kind of rebate or credit.

Most people don't make $1 million, and those that do have ways to reduce their tax burden quite a bit without much trouble.

EDIT: Small modifications to the numbers above, they were off by about 0.4% to 0.5%.



Consider applying for YC's Fall 2025 batch! Applications are open till Aug 4

Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: