Federal 25%(over 34k), Medicare 15.3% (below ~120k cutoff), Medicare 2.9%, Virginia 5.75% (over 17k /year). Now many people get tax breaks for various things but 50% income tax rate is fairly common for the upper middle class without much in the way of a safety net or public heath care.
I'd also push back on "not much in the way of a safety net". I'd like universal single-payer health care, but in the meantime it's worth remembering (a) once you hit retirement age, you very much do get public health care, and (b) retirement age is when you're most likely to incur medical expenses.
The problem is that salaries in DC aren't double Austin.. they're more like 1.3-1.5x.
Also, once you're about the 50k threshold for income, some of those deductions - like for student loans - start decreasing and disappear.
The only deductions I mentioned --- mortgage interest and state taxes --- don't vanish at $50k.
Higher taxes because I choose to pay other people for housing for the rest of my life? Huh?
You are free to disagree at length with both of those beliefs and I won't fault you for doing so, except that if the best argument you can muster is "no fair, I just want to rent" I may roll my eyes.
But the thing I really wanted to point out is, there are 104905480 things we can debate on HN where a change of perspective might be productive. This isn't one of them; the mortgage interest tax deduction is a psychological pillar of the middle class of the US and eliminating it would be painfully disruptive to huge numbers of voters.
Narcotics will be decriminalized nationwide before we lose deductible mortgage interest, is my prediction. People have strong feelings about drugs, too, but the decision to legalize them or not doesn't change whether they can still afford the cable bill.
This is fundamentally an issue of the tax code, once again, favoring those who are well off while disadvantaging those who are not.
If that doesn't concern you, then so be it.
Hopefully the mortgage interest deduction will go the way of ethanol subsidies.
[1] https://en.wikipedia.org/wiki/Mortgage_Interest_Relief_At_So...
As tptacek pointed out you are ignoring that the state tax is federally deductible and that the income tax rate at the 25% bracket is the marginal rate.
At that income level (around 100k/yr), the tax federal taxes reported to you on your last pay stub of the year should be around 28%, when you count FICA (6.2%) and Medicare (1.45%). Add to that whatever your state income tax is (most states have an income tax). As an example, I have to pay 4.63% to the state of Colorado. I think most states that impose an income tax are within a few percent of that. Then add the hidden employer side of payroll tax (another 6.2%), and you end up with a figure that is close to 40% of income.
Minimum standard deduction and a single personal exemption will remove a few percent from this figure at filing time, and you can delay tax payment through 401(k) contribution, but it is still a very heavy tax rate. It is just well hidden from the average income earner by putting the taxes into a number of buckets.
20% sounds low to me too (makes me wonder whether he missed FICA), but add all them together and you're still not giving half your money away.
I never knew someone in the US that had to get cash to the doctor on the side or bring their own toilet paper and food to the hospital.
I had a friend who broke his arm. The emergency room doctor wouldn't touch him until the family provided some cash.
If you have to provide extra bedding, food and toiletries for a hospital stay on your own - those costs aren't reflected in the taxes that one pays for health care.
This has nothing to do with debating the merits about either system, I'm purely talking about trying to accurately compare the costs.
The system you describe is obviously corrupt, and I sympathize with the frustration, but I might prefer a system where I had to spiff doctors a couple bills to get an arm set over a system where I could be both insured and bankrupted by minor surgery that happened to snag a loophole in my policy. That's the private market insurance system we have in the US.
I lived in the US most of my life. The health care system there is pretty messed up - in my opinion. But when I moved to Hungary I realized I'd been quite naive about how things are here.
I assumed it was a rather cut and dry fact that health care would be better here - and it isn't as simple as I had assumed.
For those interested, this is the reality in my country, Slovenia, which borders Hungary (I may have botched some numbers regarding taxation, but the principle behind calculations stands):
1. Out of every monthly salary you pay: income tax, state/public pension fund, health insurance and also a small tax (<1%) called parental security.
2. A woman or a man may take up to 12 months of parental leave, which is fully paid by the state. The government uses money from 'parental security' tax to pay for this privilege. It works, because at any given moment there are many,many more employees not on parental leave than those on parental leave.
3. A woman is entitled to sick leave during pregnancy if her doctor makes such decision. So it may well be that she is absent for two years from her job. And it is also true that many women abused this privilege simply by convincing their doctors that they 'cannot perform on the job while pregnant'. A few years ago there's was a sort of clampdown to this practice by tightening the control on the doctors' decisions. So it's not that pervasive anymore.
4. A woman is also entitled to reduced workday (only 4 hours instead of 8) while her child is under 6. Her salary is of course halved, but state covers her pension fund as if she worked 8 hours. Many women don't decide to use this option, simply because a halved salary puts a lot of strain to majority of families' incomes.
5. Regarding firing workers: similarly to Hungary it's very difficult to fire someone and almost impossible to fire pregnant women or old people. Therefore, majority of people under 35 don't have regular contracts, but they work via independent contracts or the so-called self-employment companies (you establish a company in which you are a sole employee and then go work to another company which pays you via your small company). Needless to say, job security is practically non-existant if you aren't on regular contract.
6. Progressive income tax is also here, however it's not as brutal as in Hungary. Lower salaries (<1k euros) are actually not taxed that much. The problem is only that the highest tax bracket (41%) comes already at 2k euros and that hits middle class the most. We, skilled professionals, are usually complaining the most about this fact. There are discussions to change this taxation in order to stem the brain-drain. It's also important to know that progressive taxation is applied on 'past-the-post' principle: e.g. you are taxed 41% only for your income that goes over a certain amount. This means that if your salary is 2k euros, you'll be taxed 41% only on income past 1.5k euros, that is 500 euros will be taxed 41%, 1.5k euros 27%.
7. Grey economy/tax evasion is certainly a problem, however the tax bureau is becoming more and more powerful and it's connected with banks. It's actually not that easy to cheat anymore. That goes for majority of people/businesses, richest top 5% still game the system by moving the money to Cyprus/Luxemburg shell companies and so on, but this can't really be helped unless it's solved on EU level.
Ok, I'll stop now :-). If you have any further questions, then do ask.