4 ms·

You are far from the only person who's saying this, but I don't understand how you can reach the conclusion that you would enjoy a lower standard of living in S

• overeater 8y ago
  Agreed. I think many people just don't do very precise math. But the other part is the extra income tax in CA versus TX, which is about 10% of the income, so subtract 10K from that 70K.
  • tbrock 8y ago
    There are SF taxes also so it’s even worse.
    • URSpider94 8y ago
      SF does not have an income tax.
    • overeater 8y ago
      There's no SF city income tax. Are you thinking about sales tax? In most cases, sales tax should be negligible unless you're spending ALL of your money, and spending it ALL on local purchases. Things like flights, vacations, online services, etc. don't have local sales tax applied to them.
• hammock 8y ago
  Tax difference between Texas and California is pretty significant, he is probably looking at double his effective tax rate once you account for the bump in income.
• steev 8y ago
  I think a better comparison in situations like these is to look at the cost of buying a house. While renting may be the norm in places like SF and NYC, in the midwest the norm for people making a good living is buying a house. I imagine the math is more along the lines of "how much would it cost to buy a comparable house in SF?" In which case, you may be going from a $400k house in TX to a $2M+ house in SF. If all your money is going to a monthly mortgage, you don't have extra to spend on cars and vacations.
  • charmides 8y ago
    It seems to me that by living as a frugal software engineer in SF, you will be much faster to save money for a $400k house in Texas than if you choose never to leave Houston. Buying a 2 million dollar house in SF makes little sense to me unless you're really wealthy, so I don't understand why this is a better comparison.
    • sithadmin 8y ago
      Yeah, but some of us don't actually want to struggle through several years of frugality in SF for the sake of buying a $400k home in Texas in cash. Why not have a much better quality of life in Texas, take out a mortgage on the $400k home, and consider the relatively reasonable interest rate as a payment towards positive aspects of life such as "reasonable commute times" and "not worrying about the kids stepping on needles on the sidewalk".
      • charmides 8y ago
        I suppose that's an entirely valid way to think about it, especially if you have a family.
      • pm90 8y ago
        The frugality is usually when you're single with no family. Once you start a family, a lot of equations change. I made the calculation. I could get a nice mortgage for a 500k house in Austin, TX, or I could move to SF, save for 4 years and go back with enough cash in hand to buy the home outright. The decision wasn't hard to make.... It probably isn't polite to say this but if you're young and single, you can really leverage that. Most of my coworkers in TX were getting married, buying houses etc. In other words, they simply could not move to SF, since they are tied down by their situation. I could, and I did.
• skookumchuck 8y ago
  My math says $100,000 - $41,000 = $59,000. Not $70,000. > not accounting for taxes That would be a large mistake. California has huge income taxes, Texas none. It's not just state taxes, a doubling of your income puts all that additional income in a much higher federal tax bracket. I would expect renting a parking spot in SF to cost a pretty penny, too.
  • akhilcacharya 8y ago
    Whereas, Seattle has zero income taxes, cheaper housing, and equivalent salary
    • User23 8y ago
      Yeah, but you have to live someplace that's so depressing that 90% of the population is overweight and self-medicates with some combination of coffee, alcohol, marijuana, and adderall.
      • toasterlovin 8y ago
        I know it's hard to believe, but some people actually find the weather great in the Pacific Northwest.
        • User23 8y ago
          Yeah Vancouver island is beautiful! Oh wait I misread that as some people find great weather in the pacific northwest.
        • akhilcacharya 8y ago
          I agree. I lived there during the “worst” season - Sept to Dec - and I loved it!
    • skookumchuck 8y ago
      > Seattle has zero income taxes I wouldn't count on it. Seattle just passed a city income tax, despite it being against the state Constitution, trying to gerrymander it around the wording of the Constitution. At the state level, the Democrats in the last election got control of both houses of the legislature, as well as the governorship. High on their agenda is finding a way to tax income.
• deleted 8y ago
  [deleted]
• URSpider94 8y ago
  At those income levels, taxes will eat up nearly 40% of your incremental income (30% federal, 10% state). Not to mention you’d also have to make up the tax on your original 100k, which Texas doesn’t charge. On top of that, everything else is more expensive as well, especially anything based on labor, because people have to pay the rent: - food, especially eating out - car insurance - services such as car repair, dry cleaning, housekeeping
  • windows_tips 8y ago
    Also, ~10% sales tax on many things that you actually spend money on.
• closeparen 8y ago
  >How does the higher cost of living in SF manage to eat up all that money in just a year? It would be imperative to save at least 100% of the "extra" $70k to make reasonable progress towards a down payment.
• superfrank 8y ago
  Not OP, but I think you are overlooking a few things. First, taxes start being a good chunk of your income at higher income brackets, especially in California. Taxes in 50k in TX will be a good chunk less than half of taxes on 100k in CA. Second, a city like SF will have expenses on things that you don't have in Texas. For example, owning a car in SF means you will probably be paying at least a couple hundred a month for parking and insurance will probably be higher. Finally, major cities with high COL and rent tend to be more expensive for consumers. Things like higher rents for business and higher wages for workers will, at least partially, get passed on to customers. If you eat out a lot or have kids needing to go to day care, this can be a huge chunk of your income. I'm not saying OP is, but I know I've met some people who exaggerate for effect when they say things like "You could double my salary and it wouldn't be worth it to move to the bay area", but pretty much everything in San Francisco is more expensive than in Houston.
  • sithadmin 8y ago
    You're spot on. And note that Texas has 0% income tax. Zero. Somewhat higher property taxes than average, but it's arguable that it still works out in our favor compared to states like CA.
  • charmides 8y ago
    Thank you for the clarification. The conclusion that I'm getting out of this is that it still makes sense to move to SF if you're willing to live frugally for some years, save some money, and then move elsewhere. It probably makes less sense if you have a partner and children and you are used to a higher standard of living.
• sithadmin 8y ago
  Taxes were definitely a concern (especially with SALT deductions being gimped, thanks Trump). Further, an apartment (or payments on a home/condo) in SF at $41k/yr would almost certainly not come close to matching the size, quality, and general conveniences afforded by my current accommodations. Tack on changes in cost of living (gasoline, dining out and groceries are noticeably cheaper in Texas), and at best, my model showed that at best, I'd looking at a wash in terms of livability and income. If I were trying to move to the Bay Area to fulfill a personal goal, things would be different. But when I'm working for others? Fuck that. I'm not going to compromise on comfort and quality of life.
  • anothergoogler 8y ago
    Different strokes for different folks. The place you linked, to me, has comparatively few conveniences. Specifically, walking and bicycling are viable modes of transport in SF.
  • briandear 8y ago
    The SALT tax deduction wouldn’t matter so much if the state taxes weren’t so high in the first place. Additionally, you neglected to mention the doubling of the standard deduction. SALT deductions were essentially the federal government subsidizing state and local taxes. Rather than the feds paying California taxes, now Californians pay those taxes. The weird, but predictable thing to me is that those complaining about effectively increased taxes due to loss on the unlimited SALT deduction, don’t complain when there is a clamor to raise federal taxes: in fact, most of those people seem to support higher taxes — except when they have to pay them. There is a lot of intellectual dishonesty with many Bay Area voters — they oppose tax cuts, but then complain when they pay higher taxes. California needs to lower taxes across the board but you don’t see Brown or Gavin suggesting tax relief to account for the now higher tax burden experienced by the upper brackets. The California economy is booming despite the taxes, not because of it. Apple, Google and Facebook are driving much of the Bay Area economy — and they make the majority of their money somewhere else. Local companies thrive because of the large base of high income people that are present because of the massive tech companies. If you took away Big Tech, the high California taxes would quickly become unsustainable. But since everyone around here can afford a Tesla, people seem to think that high taxes are the cause of all of this “success.” As far as California quality of life, the weather isn’t a result of tax policy and the beaches and mountains also aren’t either. That’s 80% of what makes California have a higher apparent quality of life compared to Houston. The point is, the higher taxes aren’t the cause of a better quality of life compared to Texas. Outside of some obvious places like Cupertino, California schools aren’t particularly good — and Cupertino’s school success is a function of the culture of 60%+ Asians who tend to value education more highly than other groups. It certainly isn’t because of taxes. Washington, DC spends more per student than almost anywhere and yet have some of the worst performance. So when we talk about quality of life — it’s good in California for sure — but it isn’t because of fiscal policy, the 71 degree temperature is a big part of it.
• briandear 8y ago
  *not accounting for taxes. Or gas prices. On a day I paid, $4.10 in South San Francisco, that same day it was $2.60 in San Antonio. Even if you took public transit, that costs money too. Sales tax in Berkeley is 9.25%. I live in Mountain View and little things definitely cost more. At a restaurant the other day, I paid 5% “to account for increased labor costs.” I am happy living in Mountain View now (I grew up in Houston,) but if it weren’t for a substantial salary and stock, I could see how anyone with a family would run for cheaper pastures. Housing isn’t the only thing more expensive in the Bay Area. When you ran those housing cost numbers, that automatically took into account property taxes, now add 5-9% for California income taxes, and it starts to become a significant amount of money on just that basis alone. Add in every other California and local tax and the difference becomes even more pronounced. Texas is ranked 33 on overall tax burden while California is 10. Additionally higher Bay Area salaries also often kick people into a higher federal bracket as well. There is no cost of living adjustment for federal taxes — or state taxes for that matter.