Mainland China income tax compared with California's

For some reasons many people I've talked to think that China's income tax burden is heavy. It's true that the top marginal rate of 45% looks horrible for Hongkongers. But, HK is like, tax free, compared to most places.

From my experiences and calculations, China's income tax is lighter than California's for many people. There are several reasons.

1. The 2nd highest marginal rate at 40% kicks in at CNY80K per month, which is around USD146K per year. In California, you'll reach a marginal rate of 33% + 9.55% x (1-.33) + 1.45%, which is roughly 40.8% , at around 171K USD of taxable income. So the USD tax might looks like slightly lower here.
   But if we consider the 35% bracket pint at CNY60K/month ~ USD109K, the US marginal rate is at 28% + 9.55% X(1-.28) + 1.45% = 36.3%.
   Thus for the part of income below USD100K the effective rate would be lower in China. The top 45% will begin to have large effect on the overall effective rate at income over USD200K though.
   
2. If you don't hold mainland China passport, there's a scheme to reduce the income subject to tax by up to 35%.
3. Bonus and options are treated separately from regular income. Imagine that you split into 3 separate tax payers, and each only paying tax for the income bin of salary, bonus, or options.
   

Not all people will benefit from 2. & 3, but it'd probably apply to many who move to mainland China but still work for a foreign company.

There are speculations that China's will cut income tax this year. Hopefully the brackets will widen and the rates will drop.