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The conversation is repeatedly borked by differences in COL. Touting the national median income and then claiming someone earning $100k in SF (where the median

The conversation is repeatedly borked by differences in COL. Touting the national median income and then claiming someone earning $100k in SF (where the median income is ~$100k) is "out of touch" is frustrating.

Eridrus 9y ago
It's interesting to think about how a progressive tax code is meant to tax those who can afford it the most, but it ignores COL differences so the taxes fall disproportionately on those in high COL locations.
- kinkrtyavimoodh 9y ago
  High COL locations typically manage to offer higher salaries too, though.
  - Eridrus 9y ago
    Exactly. You get a higher salary, but everything costs more. And the government takes a larger percentage of your salary. It's hard to nail down the magnitude of the effect, but it seems like a policy that basically subsidizes lower COL locations.
    - eropple 9y ago
      Salaries versus COL, and the impacts of the perception of both, are not (usually) linearly correlated, but which side of the line any given locality falls upon is hard to predict. Salaries in San Jose, for example, are significantly better relative to COL (in part because of the halo effect from the rest of the Bay Area) than they would be in Los Angeles, where cost-of-living is high but a commensurate lifting of salary has not been seen. But considering this as a general note of unfairness rings pretty hollow to me. It's a relative scale problem; my yearly net is going to be more actionable and more usable than that of someone in a low-COL area because the work usually isn't there to begin with. As an example, from the numbers I've seen whenever I've talked to companies out there, I would probably take home between 40% and 50% more money if I relocated to San Francisco from Boston; I'm very good at what I do and my set of skills is in high demand. I'd probably pay between 20 and 25% more in expenses, including taxes. The biggest increase would, of course, be housing costs--but I would have more disposable income that I could then (because that kind of money is buy-capital money--unlike, say, a tiny pacifying bribe to look the other way while the rich monumentally loot us) use to invest and reap consistent returns in a way that is functionally unavailable to most people living in, say, the Lakes Region of Maine, where I grew up and where the average household income is about $41,000.
    - mcherm 9y ago
      > it seems like a policy that basically subsidizes lower COL locations. I would put it differently. I would have said it is a policy that is (slightly) less "progressive" in high cost-of-living areas than it is high cost-of-living areas. (Where "progressive" means those with high incomes paying a larger percentage of their income in taxes.)
eropple 9y ago
Someone earning $100K in San Francisco is still significantly above either the average or median in purchasing power in the United States. Like, to an embarrassing degree. It is not as far above the average as somebody in lower-COL areas, of course, but it's not the same thing.
scarface74 9y ago
If you limit the amount of real estate interest and tax deductions the price of houses should decrease theoretically because the house will be less attractive. If you limit state taxes there should be a net migration to lower cost states. In general I think the tax changes are bad for most people in the long term but high income earners probably skew toward professions who might be able to set up corporations and get the pass through rate on some of their income.
perl4ever 9y ago
I find it annoying when people equate COL with cost-of-housing. One doesn't scale with the other. You can afford to pay a much larger percentage of your income in housing when your rent and income are both high, because hardly anything else is especially scarce like housing in a crowded city. That's the most important reason why one lives in a city that I know of - everything except housing is more abundant and higher quality.

Eridrus 9y ago

It's interesting to think about how a progressive tax code is meant to tax those who can afford it the most, but it ignores COL differences so the taxes fall disproportionately on those in high COL locations.

kinkrtyavimoodh 9y ago
High COL locations typically manage to offer higher salaries too, though.
- Eridrus 9y ago
  Exactly. You get a higher salary, but everything costs more. And the government takes a larger percentage of your salary. It's hard to nail down the magnitude of the effect, but it seems like a policy that basically subsidizes lower COL locations.
  - eropple 9y ago
    Salaries versus COL, and the impacts of the perception of both, are not (usually) linearly correlated, but which side of the line any given locality falls upon is hard to predict. Salaries in San Jose, for example, are significantly better relative to COL (in part because of the halo effect from the rest of the Bay Area) than they would be in Los Angeles, where cost-of-living is high but a commensurate lifting of salary has not been seen. But considering this as a general note of unfairness rings pretty hollow to me. It's a relative scale problem; my yearly net is going to be more actionable and more usable than that of someone in a low-COL area because the work usually isn't there to begin with. As an example, from the numbers I've seen whenever I've talked to companies out there, I would probably take home between 40% and 50% more money if I relocated to San Francisco from Boston; I'm very good at what I do and my set of skills is in high demand. I'd probably pay between 20 and 25% more in expenses, including taxes. The biggest increase would, of course, be housing costs--but I would have more disposable income that I could then (because that kind of money is buy-capital money--unlike, say, a tiny pacifying bribe to look the other way while the rich monumentally loot us) use to invest and reap consistent returns in a way that is functionally unavailable to most people living in, say, the Lakes Region of Maine, where I grew up and where the average household income is about $41,000.
  - mcherm 9y ago
    > it seems like a policy that basically subsidizes lower COL locations. I would put it differently. I would have said it is a policy that is (slightly) less "progressive" in high cost-of-living areas than it is high cost-of-living areas. (Where "progressive" means those with high incomes paying a larger percentage of their income in taxes.)

eropple 9y ago

Someone earning $100K in San Francisco is still significantly above either the average or median in purchasing power in the United States. Like, to an embarrassing degree. It is not as far above the average as somebody in lower-COL areas, of course, but it's not the same thing.

scarface74 9y ago

If you limit the amount of real estate interest and tax deductions the price of houses should decrease theoretically because the house will be less attractive. If you limit state taxes there should be a net migration to lower cost states. In general I think the tax changes are bad for most people in the long term but high income earners probably skew toward professions who might be able to set up corporations and get the pass through rate on some of their income.

perl4ever 9y ago

I find it annoying when people equate COL with cost-of-housing. One doesn't scale with the other. You can afford to pay a much larger percentage of your income in housing when your rent and income are both high, because hardly anything else is especially scarce like housing in a crowded city. That's the most important reason why one lives in a city that I know of - everything except housing is more abundant and higher quality.