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Talk » Sales » Discussing 'Taxes in NYC pale compared to Mickelson's'

Taxes in NYC pale compared to Mickelson's

Something is rotten is the state of Denmark...

Even though Brian Gay shot a final-round 63 and won the Humana Challenge in a playoff over David Lingmerth, and Charles Howell III, Phil Mickelson stole the show and the headlines with his “drastic changes” comment about US tax rates.

According to Golf Channel’s Ryan Lavner, while talking with the media after his round on Sunday, Mickelson said: “There are going to be some drastic changes for me because I happen to be in that (tax) zone that has been targeted both federally and by the state and, you know, it doesn’t work for me right now, so I’m going to make some changes”.

Mickelson went on to add: “My tax rate is 62-63 percent, so I’ve got to make some decisions on what I’m going to do”.

Mickelson and his family reside in Rancho Santa Fe, CA. California's Prop 30, which passed after last November's elections, prompted his comments.

According to the California Voter Information Guide's website, Prop 30: Increases taxes on earnings over $250,000 for seven years and sales taxes by ¼ cent for four years, to fund schools.

According to a Sacramento Bee report, the tax rate bump is more significant for California residents making more than $1 million:

And for the sliver of Californians who make more than $1 million, their new tax rate hits 13.3 percent, almost a 30 percent rate hike above their current rate.

It is estimated that Mickelson earned $47 million in 2012, according to Forbes.com. His 62-percent tax rate still leaves $18 million to pay for groceries and put into his IRA.

http://bleacherreport.com/articles/1495113-phil-mickelson-speaks-out-about-tax-rates-may-make-drastic-changes?utm_source=cnn.com&utm_medium=referral&utm_campaign=cnn-sports-bin&hpt=hp_bn14

> It is estimated that Mickelson earned $47 million in 2012, according to Forbes.com. His 62-percent tax rate still leaves $18 million to pay for groceries and put into his IRA.

LOL that's hilarious. i'd say though that instead of saying "to pay for schools", saying "to pay for pensions promised in the past" would go better with high income earners. next thing you know, they decide to close schools.

It appears that Mr. Mickelson lacks competent financial advisors.

There is a mason dixon line with paying income taxes that really gets under someone's skin and propels most no matter how much you make to actively seek alternatives whether by looking for shelters, moving, and for some, downright evading.
That line is the 50% mark.
Its a pyscholgical barrier that I think is poisonous to a person's will and determination to progress in their financial lives.
This will be just the beginning.

He has a pretty crappy accountant, that's for sure...

Some idiots act like Mickleson shouldn't be upset. Why the phuk should he be happy about giving 60% of his mula to the govt ??

It isn't like Phil is adding much benefit to society. So while I don't agree with bigger government, I don't cry for these well paid athletes.
My statement here isn't intended to be a logical one however.

if he was in finance, he'd be paying about half. think about that one.

He probably doesn't file a W-2, so he has to take out 15 % for SS and Medicare, 13.3% for the state, and then has the new federal tax rates since his earnings are Income, not capital gains/dividends. I haven't done the numbers but sounds like well over 50% to me even after deducting the state taxes.

People also forget that a 3.3% increase in taxes, which sounds like a little, amounts to a 6.6% deduction in earnings if you are already paying 50%.

A million here and a million there and pretty soon you are talking real money to an individual.

Like I said, once you pass the 50% threshold, you feel like your just moving uphill and against the wind.
More than 50% is universally disheartening to anyone at any dollar size.

of course, SS is capped at around $110 K so the 15% goes down to 3% after that. and, of course, he can deduct his CA taxes from his federal taxes so that 13% is actually 9%. and of course he can deduct all of his expenses in connection with playing golf.

so...39.6 3 9=50% before deducting expenses.

truth, couldnt agree more. while its certainly difficult for anyone to have "pity" on mickelson given his earnings last year, there is an underlyng point here that will get swept up by those who think his whinging is way out of line. even 50% seems out of whack when all of us have a front seat to graft and corruption the permeates every level of government, especially at the municipal and state level.

while i applaud obama for the social justice issues he is currently espousing, this tax till they wither and die mentality to feed the beast is a road to disaster.

Income is mobile, imagine that.

It's pretty shocking that he was a CA resident all this time. The vast majority of his income is from endorsements, so he was unnecessarily paying millions and millions of state tax all along. (There's a good reason why Tiger was a FL resident.)

AvUWS, you and Gay sound ignorant. You only pay SS up to $113k. Any income above this is free and clear of SS taxes Its LITERALLY impossible that his marginal rate in CA could be above 51 or 52%. There is no scenario where they could be higher whatsoever.

This of course assumes that he has ZERO deductions outside of state and local taxes - which seems unlikely. Or that he earns ZERO percent of his money from dividends and capital gains (from monies invested in previous years.)

It seems EXTREMELY unlikely that he has NO money invested and made no charitable contributions. Its also literally impossible that even TurboTax did not tell him he could deduct CA state income taxes from his Federal taxes.

You are all forgetting there are per-day taxes on his profession as a professional sports athlete in most of the states and foreign countries he visits.

It's conceivable that new federal new CA state medicare out-of-state pro sports taxation could be 62-63% of non-passive income for Phil.

Phil doesn't have to play golf you know.
No one needs to cry for Phil.

Jason - blame my ignorance on the fact that only once in my life have I passed that threshold myself. Hopefully more in the future, but for most of us it isn't something we remember because it isn't something we experience.

perhaps he has taxes you don't know about because you don't live them yourself, just as crescent just pointed out.

When Gerard Depardiu left France he claimed his tax rate was 85%. Some French tax bureaucrat claimed it couldn't be over the new 75% tax rate. But when someone analyzed the tax structure the bureaucrats admitted that yes, it was possible for someone to be paying 85%.

thats a very solid response, greensdale. i don't think anybody is crying for phil but it totally misses the point.

Nope, it impossible for his taxes to be higher than 52%, full stop. His per day taxes paid in other places would be deductible from both California and Federal taxes. You think ALL those celebrities living in both NY and LA who film TV shows and movies around the world have not already figured all this out?

That's why I added the separate marginal rates up- such a calculation, which people do in their minds all the time, excludes deductibility and other interaction of different rates, and could add up to 62-63%.

Lots of people in NYC say, my rate is 50% = 40% Fed, 10% NYC when it's really like 46% taking into account deductibility.

And, no, Phil's foreign taxes paid would not be deductible in California.

It doesn't miss the point at all. If Phil stops working because taxes are too high, who else in society is harmed? No one. And so Phil's taxes going down benefit no one either, except for him.
Who wants to listen to a guy like that whine. Seriously, he whines on tv about his arthritis, and then he gets paid for that. Tough break, what is he hoping for now, an endorsement from HR Block?

Maybe he could team up with Paula Dean who encouraged people to get diabetes and then turned around to sell the diabetes drugs.

how about you take on the larger issue at hand here. listen, doughboy phil is not a sympathetic sort by any means but ANYONE who is expected to "pay their fair share" when that number starts to exceed 40% requires a reconnection with reality. its poppycock, bs political bluster perpetrated by those who couldn't get to that level of taxation if their lives depended on it.

its not about leveling the playing field or extending a true safety net to those in need, its about a power grab and control. its proven to be a failed model going back generations and even centuries. however, a few progressive-minded folk think they have it all figured out. just look at your "representatives" in nyc and nys. what an abysmal, putrid lot - and we are paying the way for them to be even more invasive, parasitic and intrusive into our lives. some others, not so much.....

You don't get to tell me to take on "the larger issue at hand" and then use the word "poppycock".

Should the entire entertainment industry be shut down because it adds nothing to society?

50% miraculously becomes 63% and mikelson complaining suddenly becomes a call to shut down the entertainment business?

Let them be taxed. The Hollywood elite always thinks it knows best about other people's taxes.

thought i was pointing out the obvious, but maybe not for some.......

yep, those hollywood elite just got almost a half a billion valentine from the gvmt due to the terrible devastation they thankfully survived due to hurricane sandy. starting to come into focus now? poppycocker....

?

ah, forget it.

Once again, Jason is stuck in the weeds and fails to grasp the headline.

That 51.9% excludes social security and medicare, and the new obamacare taxes. It also doesn't take into account that dividends and LT capital gains are taxed at a much lower rate.

However I can assure you that since I moved to FL from Manhattan, I've saved scores of thousands of dollars in tax and scores of thousands of dollars in expenses. So yes, once you get to the 50% marginal rate, IMHO it gets burdensome - especially had that rate started at $250k, instead of the $400k ultimately agreed to.

Greensdale, are you kidding? Discussing Phil quitting golf, you said "who else in society gets harmed? noone." Do you not understand that he employs many people and buys many high end items that few can afford? Just ask his caddy or caddies, his nanny or nannies, housekeeper, groundskeeper, car dealer, insurance person, doctor, lawyer, accountant, people who manufacture and sell his golf equipment etc etc "who gets hurt if he quits." I am no fan of the entertainment industry but we make these people rich and now the joke, unfortunately, will be on them as their taxes go up and take home income goes down. More importantly, there will be other casualties as well as they cut their staff and decrease their spending and philanthropy.

'That 51.9% excludes social security and medicare, and the new obamacare taxes."

WRONG. Jesus, no one who makes $1MM pays ANY marginal SS taxes. And its net-net of everything. Top marginal rate, 51.9%.

Blossom - you think that if Phil quits he'll stop buying a car and using a nanny?

"For example, the 51.9% top METR for wage income in California for 2013 under the Fiscal Cliff scenario is equal to the 39.6% federal income tax rate plus the new 13.3% top state income tax rate in California minus the deductibility of state taxes against one’s federal taxes (5.27%) plus the marginal tax rate effect of Pease returning (1.18%) plus the current 1.45% Medicare employee tax plus the new 0.9% tax on Medicare plus the current 1.45% Medicare employer tax which we assume is borne by workers in the form of reduced after-tax wages. The sum of these tax rates, which equals 52.6%, is then divided by 1.0145 (1 Medicare employer tax) because by assuming that the incidence of the Medicare employer tax is borne by workers, we must add back the employer contribution to the worker’s income. The final METR figure is thereby 51.9%."

SHUT. THE. $($*$ UP!!! Its 51.9% all-in.

Jason, get a paper bag and breathe into it. Deep breaths. We know you didn't get a bonus this year since you told us, but there's no reason to be foaming at the mouth about tax rates that you don't pay.

you really are disgusting.

Jason, I agree with C0lumbiaC0unty - foaming at the mouth is disgusting. Take a breather on this thread, would you?

hfscomm1.

its you.

you're disgusting.

keep going.

show everyone who you are.

Breathe deeply, jason, and relax. Social Security is assessed on the first $113k in income; if you're talking about a $400k income, that's a significant bite.

Medicare was raised to 3.8%, of which the employee pays 50%, or 1.9%. There is no limit on that.

You also fail to take into account the effect of AMT, which reduces the deductibility of state and local taxes. In the years I've paid it my effective tax rate (because I'm self-employed & pay both sides of social security & medicare) was around 60%.

Maybe for people making $10 million a year it's not much, but for a person making $400k in Manhattan, that's quite a lot of tax.

>Breathe deeply, jason, and relax.

I agree with stevejhx.

advice from hfscomm1?

Steve, WTF do you not understand about SS having no impact on marginal rates for people making a million? There is NOT any mathematical way you can get to 60%, self employed or otherwise. The above calculation is by two accounting professors who I am 100% sure know more about how these taxes work than you. You keep rambling about things that are included in their calculation and still get you to 51.9%. Not 60.

>You keep rambling about things that are included in their calculation and still get you to 51.9%. Not 60.
is this rambling, or just hyperventilating:
>WRONG. Jesus,
>SHUT. THE. $($*$ UP!!! Its 51.9% all-in.
>WTF do you not understand

oh look.

hfs comm1 again.

boring.

"do you not understand about SS having no impact on marginal rates for people making a million? There is NOT any mathematical way you can get to 60%, self employed or otherwise. The above calculation is by two accounting professors who I am 100% sure know more about how these taxes work than you."

First, who said anything about "people making a million"? I did not. I said $400,000, but I was specifically referring to what the proposed income limit of $250,000 would mean. That said, if you make $400,000 and are self-employed, you pay 12.4% on top of your marginal tax rates, up to $113,000 or so. That is an additional 3.5% on top of your federal, state, and city taxes. If you are making $1 million, that is an additional 1.4% on top of your city, state, and local taxes, so it is, in fact, material, even at the $1 million level.

Then, when you compute AMT, all of the offsetting tax deductions are eliminated. Moreover, if like me you operate through a corporation, you also have city and state corporation tax to take into account, which adds several thousand more dollars per year, even if you operate through an S-Corp. If you operate an LLC or a partnership or a sole proprietorship, you have city UBT to pay.

So yes, when you add it all up - and I did, because I paid it - the figure is about 60%. Every one of those 1% to 3% amounts tacked onto your marginal rate adds up, and it gets very pricey, indeed.

I'm not too interested in what your "accounting professors" say, because I have my own CPA do my taxes, and when I lived in NYC they ran to about 100 pages, and that's not even including all the payroll forms that have to be filed. Compliance and tax preparation routinely cost me $5,000 a year when I lived in NYC. It is truly outrageous.

I am confused. Is this post about Phil's tax rate earning over $40M a year or someone earning $400K a year? I want to know if Phil was exaggerating.

Seriously, I was very offended by Phil's claim. First of all, a professional athelete should not talk about money in public. If they do, it is equivalent to bragging about how much they are earning. Please let us continue to have the illusion that they play for the love of the sport and getting into the hall of fame is what they are aiming for.

Secondly, this is the United States. We have the freedom to move and live in wherever we want within the country. It is your personal matter. No need to bad mouth the state that you are living in. As a public figure, if he cannot support that 62-63% tax rate claim, then he should apologies for merely bring up this subject in an interview.

You'll never know if Phil was exaggerating unless he releases his taxes, which I'm sure he won't. In his case, not discussed elsewhere, he would also be liable to pay income tax in the states where he wins money. He would also have to pay CA taxes on that, but I don't know whether CA would give him credit for those taxes against his CA taxes. Most of his earnings are likely in the form of wages, not capital gains or dividends, so he would be subject to the higher rates; it would also depend on whether he files jointly with his wife or not.

The post, though, was about NY taxes, and in NYC, the threshold for the second highest tax rate is very low, $50,000 for a single taxpayer:

http://www.tax.ny.gov/pdf/current_forms/it/nyc_tax_rate_schedule.pdf

In NYS, you have to go over $1 million before you get to the top 8.82% rate:

http://www.tax.ny.gov/pdf/current_forms/it/it201i_tax_rate_schedule.pdf

So basically NYC/NYS you're looking at about 6.65% 3.65% 2.9% Medicare .9% Medicare 12.4% Social Security (capped at $113k) 39.6% = 53.7% whatever effect of Social Security is, let's say 3% average = 56.7% 4% UBT (essentially the same as NYC corporate) = 60.7%.

Recall as well that those rates are on AGI, but your deductions and exemptions are also phased out as your income rises - that w/o even taking AMT into account. So on an apples-to-apples comparison, you're looking at an extremely high marginal and effective tax rate for NYC.

That, as well, is w/o taking into account the Obamacare tax on capital gains.

Steve, your math was a little convoluted. For someone to take the full effect of the Social Security hit as a "rate", he is earning $110K. He then is not paying the 39.6% Fed. tax rate. I also don't know why you were adding additional 3% for social security.For someone paying the 39.6% fed tax rate, SS as a rate will then diminish. We cannot double count.

Also, if you have enough capital gain to qualify for the obama healthcare tax, then you have pretty big portiion of your capital gain income. Which should be tax at 20%. That should pull down your overall tax rate also.

The additional 3% would be the average Social Security "hit" on a person making $1 million. I didn't "double-count": if you add the numbers up you would see that the 53.7% does NOT include Social Security: it is the sum of 6.65% 3.65% 2.9% .9% 39.6% = 53.7%. I then added 3% for Social Security, but of course that changes as the more you make the less you pay as a %.

The capital gains cutoff for Obamacare is a total income of $200,000 for individuals, $250,000 for families. That would be taxed at 20% 3.8%, but it would also be subject to NYC and NYS income tax at the regular tax rate, as they do not distinguish between capital gains and regular income.

So I stand by what I wrote; I did make it clear that the figure would be different for capital gains. Then - if you are self-employed, as I and Phil are - you would be subject to an additional 4% corporate tax / UBT, which is charged on REVENUE, not on income. In other words, its 4% off the top.

For wage earners, the medicare tax is 1.45% only. Also, the 39.6% Fed tax is marginal rate also. For married couple earning $500K, the effective fed tax rate is about 29.3% only. $1M income about 34.4%. So, the $500K case effective rate would be 6.65% 3.65% 1.45 .9% 29.3% = 41%.

The $1M income family would be about 8% 3.65% 1.45% 0.9% 34.4%= 48.4%

The self-employed pay both sides of Medicare, as well, so Phil would be subject to that. He would also be subject to UBT or the corporate equivalent, which would be on business revenue, not income.

Plus your computation leaves out the fact that the higher your income goes the more of your deductions and exemptions are phased out. That even excludes AMT, which eliminates everything but home mortgage interest, approximately, which has been capped at a $1 million mortgage since Ronald Reagan, & so has lost a lot of its punch.

It's not possible to determine with pinpoint accuracy what any individual's income tax rate is on a forum like this - you need to do the numbers with software and then compute AMT separately, as the tax owed will be the higher of the two. Your 48.4% is what you calculate as the effective rate; my 60.7% was the marginal rate. But having been subject to these taxes myself and seeing the result, I can assure you that it's quite possible to get up to 60% when all of the different interactions are taken into account.

If you talk about AMT, then congratulations. You are only paying effectively 28% rate in Federal tax, not 39.6%. I think the overall effective rate is more important than the marginal rate. If the annual income of $450K is less than 1% of tax payers, then the number of people that are materially affected by that maginal rate is even smaller. For someone earning $500K annual, the new 39.6% bracket will cost them only $2,500 more per year. Not something that would even remotely destroy anyone's desire to work harder and earn more money.

And yes, I did not use any deduction to be conservative. With any deduction, the tax would only get lighter.

Steve, that you possibly make $400,000 and put forth these calculations must make poor people feel so stupid. I hope you have an accountant do your taxes.

Steve, I literally had our tax attorneys (at my company) just figure this out for work-related reasons. They consulted with the two of most high-profile tax law practices in country. Lets sum it up by saying that I am 100% correct (as is vic64) and you are 100% wrong. Unless you know more than the partners at Linklaters and Wachtell. Which I know to not be the case.

...and the memo Wachtell forwarded went out to all the top-top PE shops and hedge funds they advise too. So maybe you ought to start a competing practice.

You are back to grayed out.

"Its LITERALLY impossible that his marginal rate in CA could be above 51 or 52%. There is no scenario where they could be higher whatsoever."

I just saw a state by state analysis, and that is what it showed for CA.

Deduction phase-outs could be a big part of the cause. That is essentially a progressive tax.

http://www.nytimes.com/2013/02/16/business/high-taxes-are-not-a-prime-reason-for-relocation-studies-say.html?pagewanted=all&_r=0

Common Sense
The Myth of the Rich Who Flee From Taxes

Gerard Depardieu with Vladimir Putin in January. Russia granted Mr. Depardieu a passport after his spat with France over taxes.

By JAMES B. STEWART

Published: February 15, 2013

" just saw a state by state analysis, and that is what it showed for CA.

Deduction phase-outs could be a big part of the cause. That is essentially a progressive tax."

Yes IF that happens in the future. We are talking about NOW, present law, Linklaters and Wachtell are telling big NYC firms with partnerships and companies that pay dividends that what I say above is correct.

Actually, Jason, I do a lot of work for those two firms, but that is neither here nor there. What IS here and there is that NO tax professional would EVER tell you what your effective tax rate is without looking at all of your income and how it is distributed. As I said, being self-employed in NYC through an S-Corporation - similar to Michelson's situation, probably - I not only paid NYC / NYS / Federal income taxes, both sides of Social Security and Medicare, but also had all of my deductions taken away thanks to AMT, in addition to having to pay the equivalent of a 4% revenue tax in the form of the UBT (the NYC corporate equivalent, really, which is the same amount of money) which is not deductible from NYC or NYS taxes, in addition to NYS unemployment tax (federal is inconsequential) and NYS minimum corporate filings.

So take your tax rates, then add both sides of Social Security to it, both sides of Medicare to it, add 4% tax on revenue (not income - ergo, BEFORE deductions), and add in everything else you have to pay, then take away all of your deductions.

In NY my tax forms were upwards of 100 pages long and cost about $5,000 to produce. You're saying that your magical lawyer partners can figure out how much I owe in their heads - gee, I should ask them to do my taxes, because even if they charge $750 an hour, it doesn't take them more than 5 minutes to do.

What a bargain!

Gray me out - no biggie. But I'm telling you what the number is.

"Yes IF that happens in the future. We are talking about NOW, present law, Linklaters and Wachtell are telling big NYC firms with partnerships and companies that pay dividends that what I say above is correct."

There are already deductions that phase out...

It isn't an "if". It is a NOW.

ubt=unincorporated business tax--

a giuliani sponsored tax initiative--while handing out numerous tax-based subsidies to big corporations, he put this in place, knowing that work-at-home self-employeds would have zippo political clout to respond

steve, my acct claims that, as an s corp, and now an llc, he ois able to arrange that i beat about half of the 4% an unincorporated self-employed would pay--still onerous but not as bad as 4%

Steve, once again if you are paying AMT, you are paying an overall capped 28% Federal tax rate. It is a parallel tax calculation system. You have to calculate your tax liability with regular deduction and AMT at the same time. Whichever gives uncle Sam the bigger check, that is the one to use. If you ended up using AMT, then you are only paying 28% federal. In that case, I don't know how you can pay more than 50% overcall effective tax rate of your income.

If you were paying effective 25% federal and the last few dollars crossed you into AMT territory... that is how...

No Steve. What I asked for was what was the MAXIMUM possible rate ANYONE could pay. And these two law firms, our own in-house tax people, and apparently several tax experts quoted in several articles already linked-to in the WSJ, Bloomberg, and the NYT ALL AGREE that the maximum rate is 52% in California, followed by NYC a bit below.

If all the experts agree on this sort of topic, I just routinely assume that it is so over some random person on the Internet. That's just me.

Jason please post a link to the information or opinions.

If you were paying effective 25% federal and the last few dollars crossed you into AMT territory... that is how...

your effective federal tax rate becomes 28%, at worst. At that point, no matter how you add other tax liabilities into the equation, you cannot get to pay an overall effective tax rate exceeding 52% or so of your annual income. That is the bottom line.

If your incoming is very very large, in the range of multiple millions dollars per year, then your effective federal income tax rate will approach the top marginal rate bracket of 39.6%. Say, when all of your income is in the form of wages and 95% of that is above the $450K threshold. At that point, you would not be paying the lowly AMT rate. In reality, most people earning this much money would have a sizable portion of their income from some forms of investment returns that would lower their effective tax rate very well.

Here is a right-wing tax expert source, agreeing that 52% is the max he could pay:

http://taxfoundation.org/blog/phil-mickelsons-tax-rate

Your lawfirm provided nothing more than anyone can find in 30 seconds on NYTimes or Crains?

No, our law firm helped our tax dept show multiple scenarios. Far more detailed stuff than these articles. But the worst-case was 51.9%.

Unless you provide the document, it's meaningless here and Steve bests you.

Anyway, that's all I have to say on this topic.

He may be wrong but it looks like Steve has won.

Jason, who else did mickelson rape?

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novice, you don't a law firm to figure this out, unless you are jason looking for institutional approval to be a jackass.

39.6% top marginal rate
1.1% deduction phaseout
13.3% California (12.7% above $2m in NYC)
-5.4% extent to which a 13.3% state rate would be deducted on federal
3.8% Medicare if self-employed (1.45*2 0.9)
---------
52.4%

The -5.4% is what people forget.

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'novice, you don't a law firm to figure this out, unless you are jason looking for institutional approval to be a jackass."

No fucktard, i needed to know that number FOR WORK as I said.

This is like a John Grisham novel, the secret law firm memo that no one has ever seen before...

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These are the marginal rates for ordinary income - i don't know what they are for athletes like mickelson who pay taxes to states where they perform. i don't know what they are if you hide your income in an LLC or PC (though I think they would be smaller if they were different at all);

but I actually agree with jackass jason that it's not above 52-53% in NYC or CA- I just wouldn't have condemned mickelson for using a different calculation and forgetting the state tax deduction on federal returns.

The 1.1% comes from the fact that you lose 3% of your deductions as your income rises- so the federal rate is 39.6% * 1.03 = 40.8%. It doesn't differ unless you've lost all your deductions, which is possible at very high income but in that case, the 1.1% disappears and your marginal rate goes down.

Hmm, but thinking about that point, yes it is possible that if you lose all your deductions, you can't have a 5.4% marginal deduction, in which case the marginal rate would be almost 57%.

That would be really cool because it would give really high earners more to complain about and it would prove the flatulent jason and his secret law firm wrong.

>These are the marginal rates for ordinary income - i don't know what they are for athletes like mickelson who pay taxes to states where they perform. i don't know what they are if you hide your income in an LLC or PC (though I think they would be smaller if they were different at all);

Remember that John Edwards guy?

actually, once I looked at the numbers, you never lose all your state tax deductions. Because you get a 12 cent deduction for every extra dollar of income and you lose 3 cents for the same extra dollar to the limitation, the limitation never outruns the deduction.

I'm sure jason agrees because his law firm told him so.

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do you want more or less people to be like greens dale aka hunterbursberg aka hfs comm1?

Hi C0C0

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I am no accountant, but I agree with crescent22's analysis. As I understand it, for top-bracket NYC resident employment income:

39.60% federal
8.82% state
3.88% city
2.35% medicare
-3.84% state/city deduction (12.7% state/city rate - 3% phaseout) * (39.6% federal rate)
------
50.81%

Add another 1.45% to medicare if self-employed. Not sure what happens w.r.t. California.

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