i'm a first year associate in NYC (160 base) and am on pace to pay 39.9% of my income out in taxes. a couple of things to remember:
1) 39.9% is a slight inflated figure. under the current tax paradigm, an earner of 160k (who pays the mandated 6.2% in social security every pay period) caps out on his/her social security contributions in august. This means that you (only) contribute a total of 4.0% from your aggregate income to social security. thus, in practice, (taking my #ers as an example), you only pay 39.9-2.2, or 37.7% in taxes. i've heard some talk from some of our attnys that the continued application of the social sec cap is dependent upon the election (so there might be a 2.2% swing; i don't know).
2) 3.6% of your aggregate income is paid out in the form of a city tax. you can easily avoid this by moving across the river. if you do this, you now have: 37.7-3.6, or 34.1%.
so say, hypothetically speaking, that barack/mccain decides against / is incapable of rejecting the soc sec cap and i move to hoboken (or jersey city, etc.), i can still work in NYC and only pay out 34% of my income in taxes. not too bad.
anyone know how bonuses are taxed in NYC? i heard that bonuses are taxed at 50%. seems egregious. rumor? fact?