(Tax advisor here.) You don't get a 60% rate in the US. Anyone who claims otherwise doesn't understand the basic principles of U.S. taxation or is lying to try and make a political point.
State taxes are deductible for federal income tax purposes (meaning that they reduce your taxable income as determined for federal purposes). Also, Medicare and Medicaid taxes are part of payroll taxes (or FICA, for the self-employed), so you don't pay them both.
As every tax advisor in the CNBC article pointed out, Michelson knows diddly squat about taxes. He was taking every single tax rate and adding them together, but he should have been averaging them out. For example, the 20% rate on his capital gains and dividends replaces the 39.6% rate; he's double-counting some of the FICA taxes, and worst of all, he thinks his marginal rate (the highest rate he pays) applies to all of his income.
Thank you. I am so tired of seeing this 'federal + state income taxes are cumulative' lie. Not only is it dishonest, it's an insult to the intelligence since anyone who who has ever done their own taxes knows they're deductible just by filling out the 1040.
State taxes are deductible for federal income tax purposes (meaning that they reduce your taxable income as determined for federal purposes). Also, Medicare and Medicaid taxes are part of payroll taxes (or FICA, for the self-employed), so you don't pay them both.
As every tax advisor in the CNBC article pointed out, Michelson knows diddly squat about taxes. He was taking every single tax rate and adding them together, but he should have been averaging them out. For example, the 20% rate on his capital gains and dividends replaces the 39.6% rate; he's double-counting some of the FICA taxes, and worst of all, he thinks his marginal rate (the highest rate he pays) applies to all of his income.