For those who are not familiar with USA revolutionary history, the Boston Tea Party was a riot against an increase in tax on imported tea imposed by the king of England without any consultation with the British North American colonies. The actual complete phrase was “No taxation without representation.” The irony is, many Trump supporters are not saying anything about Trump’s unilateral decision to impose tariffs, bypassing the representation Congress is supposed to provide.
Alt text: A two panel comic. Top panel has a title of 1776, and a white man is yelling angrily. The word bubble says “Pay a 3% tax on tea and paper. Screw that! Revolution!” The bottom panel has the title Now and a white man looking despondent. The word bubble says “Pay 40% of your income. Sure that’s totally fine.”
Not to mention it’s extremely rare for someone to have an effective combined tax burden of 40%.
I got nerdsniped by this. If you’re in the US in the highest-tax state (California) filing singly with the standard deduction and all of your income was earned, you’d need to make $1,308,404 in 2025 to see an aggregate income tax rate of 40%. This would put you somewhere in the 99.9th percentile of earners.
If you instead make your money through already being rich (long term capital gains and qualified dividends), it’s impossible to ever hit 40%.
I feel it’s important to further clarify that California is only a high tax state for the very high bracket earners.
Oh, for sure, it’s just the highest one for this particular math problem.
I’m not that familiar with tax law in the USA, why is it impossible? Is it because making money by having money is not taxed, so if it makes up a large enough percentage of your income, the percentage of your total income you pai in taxes can never reach 40%? If so, at which point does it become impossible? (Unless there is a 100% tax bracket, which would be Un-American™)
Capital gains and qualified dividends cap at 20% federally and 12.3% in the state with the highest tax rate, so the tax burden on them can never exceed 32.3% at infinite earnings.
Regular income caps at 37% federally and 12.3% in California, so can get up to 49.3% at infinite earnings.
It’s really not. We pay a shit-ton of tax.
If you’re single in CA, earn $150,000 and own a home (although the property tax only contributes a few percent), your tax burden is 40%.
Total=59,553.67
59.5/150=39.7%
But hey, at least this isn’t one of those European countries where they provide great social services but tax you like crazy! /s
I take some issue with some of those numbers. My calculations look at the tax table at 150k with standard deduction, shows 52333/150000 =0.349. And even 35% takes some working at not minimizing your liability; no mortgage deduction, no tax advantaged savings etc.
Good call. I forgot to take the standard deduction. Doing that brings my calculation down to 37%.