Here's my rough estimate of someone who make $250k and live in CA. Fed tax rate is 33% and state is 9%. You're talking about 42% going to taxes. $250k * 0.58 = $145k – $39k (Married maxing out 401k and IRA) = $106k/12 = $8.8k/month.
Though I generally agree with what you said, I think perhaps in practice the 40% tax rate is a little overstated for most households in this bracket…Generally, you are well aware of the problem ahead of time, and you itemize and do what you can to bring your tax bracket down.
With the exception of last year, our tax rates were about 17%/6% , hitting AMT each year, though we have quite a bit of deductions… Having a large mortgage interest deduction/proptax deduction somewhat helps the sting a bit, as well as a few other "odds and ends" in donations. There is somewhat of a phase out in itemized deductions.
