That's fine, but doesn't actually change our analysis that much
It does actually. Quick example that will demonstrate the pattern:
Earn $100, pay tax $10, employer pays $10 for you. He's saying he pays 18% tax (20/110) and you're saying he pays 10% (10/100). Big difference.
- If we include property taxes, it means he owns property. If he owns property he could (likely) avail himself of the home mortgage interest deduction.
- I can dismiss them because while regressive, they're (in order), not part of our hypothetical, not taxed at 30%, and not significant enough to make that much of a difference for someone making $150,000 per year.
On (1), I rent. My landlord pays $3k in property taxes. I guarantee you that in fact I pay that $3k.
On (2), okay, they're not part of the "hypothetical" but your entire argument is that we need to have this conversation rooted in reality. How is dismissing a significant portion of taxes not ignoring a significant part of reality? His argument is clearly talking about a total tax burden. If you're trying to drill down to just federal income tax, then you win, but his original comment clearly included state taxes and you talked about "effective tax rates" which generally means the full tax burden.
They also absolutely do make a difference to someone making $150k/year. At that level, CA state income for a married couple with no kids is a bit over 5% or $7500.
But my point is mostly that the starting point for this discussion has to be "actual tax law", so this guy's story being "we pay 40% in taxes" should be relevant if and only if they actually pay 40%.
And many people, myself included, do pay over 40% provided you're willing to tally state and federal income tax, my and employer SSDI, and my property tax. After that, I have the full suite of gas tax, fees, and 9.25% local sales tax which take it to the low to mid 40s%.
I'm doing well and don't feel like I'm being robbed. But I also am not some mythical figure, I'm still up to my ass in student loan debt, owning a home in CA is not going to happen because a home near a decent school is still $600k.
I've also got all the easy deductions. What that means is that as my income rises, my effective tax rate will go up because it is all in the highest bracket. The only way my effective rate will go down is if I have a kid, and the tax break doesn't even come close to offsetting the cost.
Lots of real people pay over 40%. The uber rich are in the sub 20%, but not the $120-180k two income no-kids crowd. We're in the 40s. Not asking for sympathy, but I do indeed think I'm paying my fair share.