Reply to post: He lives in California (Los Gatos) so he is a CA tax resident; top tax rate 55.8%

Woz says 'Jobs started Apple for money' – then says it must pay 50% tax like he does


He lives in California (Los Gatos) so he is a CA tax resident; top tax rate 55.8%

The math for a CA resident who is a millionaire is:

Federal tax: 39.6% (Obama repealed W's gratuities)

Medicate: 2.9%

Social Security (Pension): 0% (it stops at $118,000 income)

California: 13.3% (CA introduced an excessively-rich tax and a millionaire tax!)

Santa Clara (County): 0% (I don't think they've started levying an income tax, they didn't when I lived there, just a sales tax).

Los Gatos: 0% (I think).

TOTAL: 55.8%

Simple, eh? Note that employees only "pay" 1.45% medicare, but their employer's pay the other 1.45%; self employed people pay both halves. I don't know if CA cities and counties can levy income taxes, normally in the US they only levy purchase (sales) and wealth (property) taxes, but some cities levy income taxes.

There are marginal effects that raise and lower the rate (particularly the limitation on Schedule A deductions) but by the time you hit millionaire status they've all worked themselves out. (After all, the highest ever US tax rate was over 100% in the 1990s, but only very poor people ever suffered from that misfortune.)

Most rich USians assume that state taxes are deductible on Schedule A, reducing the effective rate of the federal tax (by a factor of (1-state)), but the Schedule A limitation kills that for millionaires, so the number in the end should reduce to simple addition.

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