OCrenter is right because he was able to distinguish between AVERAGE tax rate and MARGINAL tax rate. A lot of journalists and politicians also get this wrong.
Average tax rate is your income tax paid relative to total income. Marginal tax rate is the amount of tax paid on your last dollar earned, or the next dollar you chose to earn. In a progressive tax system like ours the first few thousand earned have no tax levied in a particular year. Once earnings get high enough, the marginal rate marches up to about the 50% level, state plus federal, depending on the state. In CA the highest federal marginal tax rate is in the mid-30% range, and the CA state highest marginal tax rate will soon be 13.3%, thanks to the passage of Proposition 30. The fed rate will go up in 2013 too (even if the fiscal cliff is avoided). That means the marginal rate for high earners will soon be well over 50% for Californians.
Economists like to concentrate on the marginal rate, because that is what people consider in their decision-making: whether to earn more or less, move to another state or not, put another family member to work, etc.
