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I pay nearly 48% tax to state federal and city, and it does significant damage for my ability to grow in the Bay Area. There is no room to be taxed more, in fac

I pay nearly 48% tax to state federal and city, and it does significant damage for my ability to grow in the Bay Area. There is no room to be taxed more, in fact the tax rate here hinders the middle and upper middle class from saving effectively for a down payment, doing actual damage to the region.

webXL 10y ago
Oh, believe me, there's room to be taxed: https://www.washingtonpost.com/news/wonk/wp/2015/03/24/how-your-disposable-income-compares-to-other-peoples-around-the-world/ https://www.washingtonpost.com/news/wonk/wp/2015/03/24/how-y... ;) Some people look at that map and think "look at all that income just being disposed of! Just think of what governments could do with all that cash!"
- SilasX 10y ago
  Those people are wrong, and there isn't room: tax revenues has been roughly constant across enormously varying [1] rates. An increase in rates will scare marginal workers (people near retirement, moonlighters, the lower-earning member of a couple) off the labor market, and direct more efforts into reclassifying consumption as a business expense, canceling much of the increase in revenues, while leaving significant economic waste in its wake. [1] https://en.wikipedia.org/wiki/Hauser%27s_law https://en.wikipedia.org/wiki/Hauser%27s_law
venomsnake 10y ago
It is expensive to be unmarried, well earning and human in the US (I think that tax rate is almost impossible to achieve for a family). I recommend you to become a corporation ...
- humanrebar 10y ago
  It's actually less expensive; it's just the payoff happens when other people's children start paying for future social security, medicare, and medicaid checks.
- rayiner 10y ago
  > It is expensive to be unmarried . . . I think that tax rate is almost impossible to achieve for a family When household income is above $150k, married couples with roughly equal incomes to each other will pay more in taxes than if they were single. That is because the tax brackets for married couples are wider than for singles, but not twice as wide.
  - tanderson92 10y ago
    Here is an interesting paper on Taxation and marriage: "Taxation and Marriage: A Reappraisal" > Marriage taxation presents a "trilemma": An income > tax cannot simultaneously maintain progressive > marginal tax rates, an equal tax burden for all married > couples with identical incomes ("couples equity"), > and neutrality with respect to the tax burden of > married versus unmarried couples ("marriage > neutrality"). Much more interesting discussion: http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=5924&context=fss_papers http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?artic...
louprado 10y ago
At least you have mobility in the U.S. as a means to reduce your tax liability. By simply moving 250 miles east, your rate would drop to ~35%. Many people leave California for this reason while others feel the extra 9-13% is worth it.
dragonwriter 10y ago
> I pay nearly 48% tax to state federal and city, and it does significant damage for my ability to grow in the Bay Area. Its possible to reach that total tax rate, though even if you manage to have no dependents or other sources of deductions, credits, etc., it takes a lot of income, even for the Bay Area (like, the kind where you could, after those taxes, meet reasonable living expenses and buy a new Bay Area home, without selling the last one, for cash every decade or so.) > There is no room to be taxed more The maximum combined federal, state, and city taxes on income (including income and payroll taxes at all levels) in San Francisco is lower than the maximum federal income tax alone in the period of the US most rapid aggregate growth (and also the most rapid relative growth of the middle class.)
- ams6110 10y ago
  During that time there were many more tax shelters. Even interest on personal debt like car loans was deductible.
deleted 10y ago
[deleted]
harryh 10y ago
I don't believe you. Your marginal tax rate might be 48%, but I would be shocked if your average rate was that high even living in a very high tax area of the US. I live in NYC (also a very high tax location) and have a pretty decent income and my rate for 2015 was just over 40%. That includes Fed, State, City, FICA & tax preparation costs.
- SilasX 10y ago
  Unfortunately, decisions are made at the margin[1], so high marginal rates cause extreme distortions and "deadweight loss"[2] -- i.e., a loss of X dollars' worth that corresponds to less than X dollars of gain for the government. [1] https://en.wikipedia.org/wiki/Marginalism https://en.wikipedia.org/wiki/Marginalism [2] https://en.wikipedia.org/wiki/Deadweight_loss https://en.wikipedia.org/wiki/Deadweight_loss
  - harryh 10y ago
    I certainly agree that marginal rates are important. I'm just saying that it's important to understand the difference between marginal rate and average rate and not use one where you mean the other.
    - SilasX 10y ago
      Okay, but to invoke the cliche: When people confuse marginal and average tax rates, they're wrong. When people miscalculate their taxes, they're wrong. But when you trivialize the damage of high marginal taxes because the average rate is lower, you're wronger than both of them put together. Also, I think your NYC numbers are still wrong since they seem to leave out sales tax. I know that for SF, a typical tech worker's state/federal taxes would be about 40%, and when you throw in the 10% sales tax health mandates, it's right about 45%.
      - harryh 10y ago
        I wasn't trivializing the damage of high marginal tax rates. Also ya, I left out sales tax (I don't have any precise records on my yearly sales tax expenditures. I suppose I could estimate). I also left out the employer side of FICA which is really a tax I'm paying. I also left out the % of my rent that goes to pay my landlord's property tax. I also left out corporate taxes I'm responsible for as an owner of stock in various public companies. Truly calculating the total taxes that fall on me as an individual is probably impossible at some level. So I included the taxes that people commonly refer to when talking about "paying their taxes."

webXL 10y ago

Oh, believe me, there's room to be taxed: https://www.washingtonpost.com/news/wonk/wp/2015/03/24/how-your-disposable-income-compares-to-other-peoples-around-the-world/ https://www.washingtonpost.com/news/wonk/wp/2015/03/24/how-y... ;) Some people look at that map and think "look at all that income just being disposed of! Just think of what governments could do with all that cash!"

SilasX 10y ago
Those people are wrong, and there isn't room: tax revenues has been roughly constant across enormously varying [1] rates. An increase in rates will scare marginal workers (people near retirement, moonlighters, the lower-earning member of a couple) off the labor market, and direct more efforts into reclassifying consumption as a business expense, canceling much of the increase in revenues, while leaving significant economic waste in its wake. [1] https://en.wikipedia.org/wiki/Hauser%27s_law https://en.wikipedia.org/wiki/Hauser%27s_law

venomsnake 10y ago

It is expensive to be unmarried, well earning and human in the US (I think that tax rate is almost impossible to achieve for a family). I recommend you to become a corporation ...

humanrebar 10y ago
It's actually less expensive; it's just the payoff happens when other people's children start paying for future social security, medicare, and medicaid checks.
rayiner 10y ago
> It is expensive to be unmarried . . . I think that tax rate is almost impossible to achieve for a family When household income is above $150k, married couples with roughly equal incomes to each other will pay more in taxes than if they were single. That is because the tax brackets for married couples are wider than for singles, but not twice as wide.
- tanderson92 10y ago
  Here is an interesting paper on Taxation and marriage: "Taxation and Marriage: A Reappraisal" > Marriage taxation presents a "trilemma": An income > tax cannot simultaneously maintain progressive > marginal tax rates, an equal tax burden for all married > couples with identical incomes ("couples equity"), > and neutrality with respect to the tax burden of > married versus unmarried couples ("marriage > neutrality"). Much more interesting discussion: http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=5924&context=fss_papers http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?artic...

louprado 10y ago

At least you have mobility in the U.S. as a means to reduce your tax liability. By simply moving 250 miles east, your rate would drop to ~35%. Many people leave California for this reason while others feel the extra 9-13% is worth it.

dragonwriter 10y ago

> I pay nearly 48% tax to state federal and city, and it does significant damage for my ability to grow in the Bay Area. Its possible to reach that total tax rate, though even if you manage to have no dependents or other sources of deductions, credits, etc., it takes a lot of income, even for the Bay Area (like, the kind where you could, after those taxes, meet reasonable living expenses and buy a new Bay Area home, without selling the last one, for cash every decade or so.) > There is no room to be taxed more The maximum combined federal, state, and city taxes on income (including income and payroll taxes at all levels) in San Francisco is lower than the maximum federal income tax alone in the period of the US most rapid aggregate growth (and also the most rapid relative growth of the middle class.)

ams6110 10y ago
During that time there were many more tax shelters. Even interest on personal debt like car loans was deductible.

deleted 10y ago

[deleted]

harryh 10y ago

I don't believe you. Your marginal tax rate might be 48%, but I would be shocked if your average rate was that high even living in a very high tax area of the US. I live in NYC (also a very high tax location) and have a pretty decent income and my rate for 2015 was just over 40%. That includes Fed, State, City, FICA & tax preparation costs.

SilasX 10y ago
Unfortunately, decisions are made at the margin[1], so high marginal rates cause extreme distortions and "deadweight loss"[2] -- i.e., a loss of X dollars' worth that corresponds to less than X dollars of gain for the government. [1] https://en.wikipedia.org/wiki/Marginalism https://en.wikipedia.org/wiki/Marginalism [2] https://en.wikipedia.org/wiki/Deadweight_loss https://en.wikipedia.org/wiki/Deadweight_loss
- harryh 10y ago
  I certainly agree that marginal rates are important. I'm just saying that it's important to understand the difference between marginal rate and average rate and not use one where you mean the other.
  - SilasX 10y ago
    Okay, but to invoke the cliche: When people confuse marginal and average tax rates, they're wrong. When people miscalculate their taxes, they're wrong. But when you trivialize the damage of high marginal taxes because the average rate is lower, you're wronger than both of them put together. Also, I think your NYC numbers are still wrong since they seem to leave out sales tax. I know that for SF, a typical tech worker's state/federal taxes would be about 40%, and when you throw in the 10% sales tax health mandates, it's right about 45%.
    - harryh 10y ago
      I wasn't trivializing the damage of high marginal tax rates. Also ya, I left out sales tax (I don't have any precise records on my yearly sales tax expenditures. I suppose I could estimate). I also left out the employer side of FICA which is really a tax I'm paying. I also left out the % of my rent that goes to pay my landlord's property tax. I also left out corporate taxes I'm responsible for as an owner of stock in various public companies. Truly calculating the total taxes that fall on me as an individual is probably impossible at some level. So I included the taxes that people commonly refer to when talking about "paying their taxes."