An employee's share of SS tax is 6.4%, not 15.3%. (The full amount is twice that, or 12.4%, so I'm not sure where 15.3% comes from.) Add Medicare tax (1.45%, not 5%, and the employer pays a matching amount). You get 6.4% + 1.45% = 7.85%, not 20%. That's ~$1250. Add a 15% tax rate for a $2,000 federal tax, not 20%. We both arrive at $3,200 but I think my numbers are more accurate. Where you working backwards from a known number?
I was working back from ~20% which I had worked out before but I dropped an import etc so the numbers looked off. Anyway, we could argue about the numbers game, but self employed people pay the same effective rate so it's all BS IMO. You are correct about Medicare but wrong about SS.
For 2008, your employer withholds Social Security at the rate of 7.65% of your first $102,200 of income. For Medicare, the withholding rate is 1.45% of your income, regardless of how much you earn. (http://www.walletpop.com/taxes/article/_a/bbdp/withholding-y...)
7.65 * 2 = 15.3% but it's 15.3% of 100 not (100 + 7.65 + 1.45) = 109.1. Anyway, adding state income tax or it's equivalent's and the numbers start to go up but 20% seems like a reasonable number for federal.
If your income is low enough you do get government services which offset your cost of living, but your effective tax rate on you next dollar of earnings is still fairly high.
PS: I built a little Javascript calculator to work this out I should probably post this somewhere.
