October 2, 2026

Taxes, Taxes, Taxes

Paul Miloe, CRPS®
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Income and Payroll Taxes

Have you ever looked deeper into all the taxes you pay? While tax discussions typically focus on the major players of Federal and State income tax, looking deeper can be eye opening. Since rates can vary by income, let’s consider an individual in CA making $100,000 per year. Assuming they take the standard deduction ($16,100 Federal and $5,706 CA), that leaves them with $83,900 for Federal taxes and $94,294 for CA taxes. Thus, for the big taxes they’re looking at ~13.1% Federal and ~5.4% CA tax rates for a combined 18.5%. Since this individual is employed, they will also owe 7.5% FICA tax to fund Social Security and Medicare. Of the $100,000, they now have $74,000.

Sales Tax on Everyday Purchases

To live, you need things, and those things are largely subject to sales taxes (state and local). In CA, we have a 7.25% minimum base rate (6% state tax+1% local tax+0.25% local transportation fund), but here in Los Angeles our taxpayer example has a rate of 9.75% (with some counties even higher & the LA County rate is going up on Oct. 1st to 10.25%). Since not everything is subject to sales tax, we could discount that to 5% for this example. At this point, the taxpayer now has $69,000.

Property Tax on the Home

In addition to things, our taxpayer needs shelter, so a home was purchased. While the 2026 median sales price of a single-family home in Torrance, CA is over $1M, let’s assume the taxpayer bought the home for $1M. The property tax rate is 1% in CA under Prop 13, but local bonds, school district levies, and assessments push that higher, so we’ll assume the low end of 1.1%. That results in $8,250 in taxes, and the net income drops to $60,700.

Fuel Taxes on Driving

Since our taxpayer must get from point A to point B, they chose to buy a car. We’ll then make the added assumption that the car is paid off and not bought this year to avoid another 9.75% of the sales tax noted above. However, this taxpayer uses gasoline and the State excise tax, Federal excise tax, Cap and Trade fee, Low Carbon Fuel Standard (LCFS) fee, and Underground Storage Tank Fees add up to over $3/gallon. Fortunately, our taxpayer bought a high efficiency car that only uses 10gal/week, so by year-end the excess charges on fuel are just over $1,500 (10 x 52 x $3). At this point, the net earnings remaining is $59,200.

The Bottom Line

In short, after taxes, our taxpayer who started with $100,000 keeps about $59,200—just under 60% of their earnings. From that amount, they still must pay for food, mortgage, home upkeep, fuel, other discretionary expenses, and possibly health insurance. Given today’s cost of goods and services, that remaining income can disappear quickly, which helps explain why many people struggle to get by or save for the future. In an era of calls for higher taxes, understanding the current tax burden on a moderate-income taxpayer provides useful perspective.


All information is believed to be from reliable sources. However, we make no representation as to its completeness or accuracy. Cetera Wealth Services, LLC exclusively provides investment products and services through its representatives. Although Cetera does not provide tax or legal advice, or supervise tax, accounting or legal services, Cetera representatives may offer these services through their independent outside business. This information is not intended as tax or legal advice.

Paul Miloe

CRPS®

Paul Miloe has been a financial advisor with Albitz/Miloe & Associates, Inc. since 1996. He graduated from University of California, Santa Barbara in 1994 with a Bachelor of Science degree in Engineering Geology and Hydrology. Paul is a Chartered Retirement Plans Specialist™. His focus centers on personal and retirement planning, life insurance, portfolio management, and senior issues, including long-term care insurance. In addition to his roles as Senior Co-Vice President and CCO of our Firm, Paul is also a Branch Manager for Cetera Advisor Networks, LLC (member FINRA/SIPC). Paul, and his wife, Mary, are lifelong residents of the South Bay, have two adult children, and are active community members. Paul enjoys surfing, fishing, mountain biking, and snowboarding.

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