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I guess this is part of the post-Reagan civic reality of the US. We've given up on taxation as a means to raise money for the public good. Instead, we must rely

I guess this is part of the post-Reagan civic reality of the US. We've given up on taxation as a means to raise money for the public good. Instead, we must rely on a random patchwork of private enterprises to occasionally improve things for some people.

rayiner 7y ago
> We've given up on taxation as a means to raise money for the public good. Have we? California's marginal tax rate is over 50%, higher than many European countries. The Internet suggests that someone making $260,000 (200,000 pounds) will pay about 41.5% of their income in taxes in the U.K. https://www.thesalarycalculator.co.uk/salary.php https://www.thesalarycalculator.co.uk/salary.php. Using a similar tax calculator for California suggests that they'd pay about 39%. I assume the U.K. is also in a post-Reagan, post-tax world? Must be Reagan. Couldn't be total mismanagement at all levels of California government.
- bildung 7y ago
  > California's marginal tax rate was over 50%, Is that really true? This official calculator [1] says I'd have to pay only 16k on 200k income. And this source [2] says income tax tops out at 13.3%. [1] = https://webapp.ftb.ca.gov/TaxCalc/Home/Results https://webapp.ftb.ca.gov/TaxCalc/Home/Results [2] = https://www.communitytax.com/state-taxes/california-taxes/ https://www.communitytax.com/state-taxes/california-taxes/
  - shuckles 7y ago
    They mean on top of federal taxes. The right phrasing is probably "The marginal tax rate for a California resident."
  - deleted 7y ago
    [deleted]
  - jandrewrogers 7y ago
    That is on top of the Federal tax rate. Americans pay into two separate tax systems. It would be like paying taxes to the EU in addition to your country, which is how the US system works.
  - kbrackbill 7y ago
    I'm guessing they're talking about the total taxes for someone living in California, including federal and local as well as state.
    - mywittyname 7y ago
      Which is disingenuous, because 75% of those taxes would remain, regardless of where a person lives in the US.
      - zepto 7y ago
        It‘s not disingenuous - the point was that a lot of tax is being collected not that California is special. Tax is comparable to Europe and yet services are not. The problem is therefore the government.
  - phamilton 7y ago
    16k on 200k isn't a marginal rate calculation. Top federal rate is 37%, top state rate is 13.3%. Total top marginal rate is 50.3%.
- shuckles 7y ago
  As a mechanical point: income tax comparisons should also include payroll taxes. It may not flip the analysis here, but payroll taxes tend to be much higher in Europe.
  - rayiner 7y ago
    I think the calculator above includes payroll tax (= national insurance tax in the U.K.)
  - papln 7y ago
    They should also include health insurance, which they don't in the US, and costs about $10K/yr (with high variance for family size and benefits package), or another 2-4 % on rayiner's example (again, high variance due to # of wage earners).
- dmix 7y ago
  Bay area tax rates are about the same as living in Toronto, minus the public health insurance. I'm also skeptical a lack of tax money is the root problem here...
- Apocryphon 7y ago
  The U.K. is in a post-Thatcher world, yes.
- dmode 7y ago
  This is not remotely true. I make more than that, and my effective tax rate is 27%. This because, US has a very convoluted tax system with a whole bunch of deductions. And both Fed and state tax systems are progressive, so you simply cannot add them up, since only a portion of that is applied to your highest income level. Not factor in property related deductions, health care related deductions, children related deductions, and various investment loopholes.
  - rayiner 7y ago
    Note that the 50% figure is marginal tax rate. In California, it’s basically what you pay in your 500,000-th dollar. Which is higher than the 45% you’d pay in the UK. (Though the tax burden is higher in the U.K. unless you make millions because the brackets kick in earlier.) The figure I cited above is from a tax calculator that I’ve found to be pretty accurate. Note that the various deductions are much less valuable for high income earners under Trump’s new tax plan due to the limit on SALT deductions. Finally, while the calculator I used excludes US credits for healthcare, children, etc., the calculator I used for the U.K. also does that. The hypothetical is basically a single Google programmer who rents and has no kids.
    - gamblor956 7y ago
      You are literally just spreading a lie over and over again. CA's top marginal tax rate is 12.3%. If it were >50% no rich person would live in the state. The combined state and federal rate is not >50% either, and any calculator that claims otherwise is lying. And that's before you even take deductions into account. If you're paying >50% marginal tax rate in CA, your accountant should be fired. And possibly investigated for embezzling funds from you in the form of "tax payments."
      - rayiner 7y ago
        I think it’s pretty clear from my post that I’m talking about combined state and federal taxes in California, especially given the comparison to the U.K. which has a single level of income tax. It makes no sense to just look at state taxes, because a lot of federal taxes go back to the state as grants (transit, highway, Medicaid, ACA subsidies, education), or go to pay for social services the state would otherwise have to pay for itself (Medicare, Social Security, food security, etc.) As to the combined marginal rate, it’s 50.75% on labor income above $576,000 (12.3% state, 37% federal, 1.45% Medicare). Then there is a 1% surcharge on incomes over $1 million. I’m not sure why you’re talking about dedications because that won’t affect the top marginal rate.
- mattlondon 7y ago
  Wow that is a lot closer than I realised. I was always of the assumption that the US tax rate was much lower than the UK and Europe. That 2.5% extra in the UK (so about £5k/$8k a year) includes free healthcare too (plus at £200k you'd almost certainly be in a job that also has excellent private health care for you and your family with no extra payments as well as the free NHS). I understand that this can cost many tens of thousand in the US even before you use it. I just don't get the US system sometimes I really don't. Perhaps instead of calling for SV companies to move elsewhere in the US, why not just come to London or Zurich or Berlin?
- gamblor956 7y ago
  California's top marginal tax rate is 12.3%. The combined state and federal marginal tax rate does not exceed 50% either.
  - toast0 7y ago
    For 2019, the federal top rate is 37% and the California state top tax rate is 13.3%. You'll have hit the SALT deduction cap way before you hit the top marginal rate, so if you get there, you're looking at a marginal rate of 50.3%, which does exceed 50%. Medicare adds another 1.45% as well.
    - gamblor956 7y ago
      Your CA rate is off by 1%, and you're adding additional contingent levies to breach 50%.
- triceratops 7y ago
  > California's marginal tax rate is over 50% It is not. The top tax bracket (income $1m+) is 13.3%[1]. Where are you getting this number from? 1. https://www.tax-brackets.org/californiataxtable https://www.tax-brackets.org/californiataxtable
  - usaar333 7y ago
    GP is obviously referring to the combined fed + state rate in context.
    - triceratops 7y ago
      1. It's not obvious at all. 2. It's slightly disingenuous to call it "California's marginal tax rate" when 2/3 of that figure comes from federal taxes. It's like saying "Texas's marginal tax rate is 37%". 3. The SALT deduction changes have made it so that residents of states with high taxes are effectively double-taxed. California isn't responsible for this state of affairs.
vondur 7y ago
California is one of the states with the highest overall taxes in the US. I don't think it's lack of tax revenue that the problem here.
- luckydata 7y ago
  not really. California has high INCOME taxes compared to other states but significantly lower real estate taxes, and revenues due to the infamous Prop 13. Commercial real estate is the most significant source of deficits in this state.
graeme 7y ago
This isn't a tax issue. The california govt has made it largely illegal to build new housing. If you restrict supply you get a shortage. You could say california has given up on building cities.
- gamblor956 7y ago
  This is FUD. Within 10 blocks of where I live more than 30,000 new units are being constructed (or have finished construction) in a 3 year window. That doesn't include the dozen residential buildings of 100+ units I see on my daily commute, or the other dozens of buildings being built along public transportation routes in LA. Long Beach and San Diego have also experienced residential building sprees. The problem is that California is such a desirable place to live that even with all the undesirables leaving the state for the South, we still can't keep up with the growing demand for new housing.
  - graeme 7y ago
    I don't live in California. I live in a place with functional zoning laws and no parking minimums. These greatly restrict density in places like LA. This WSJ piece is instructive. Tokyo has seen flat housing prices despite population growth. The secret? Tokyo had a lot more housing starts than NYC or SF. Yes, california attracts new people. A sensible housing market would build more houses to build them. It is not clear how higher taxes would help, unless you think higher japanese tax rates cause their private sector to build more. https://mobile.twitter.com/wsj/status/1113274956765331456?lang=en https://mobile.twitter.com/wsj/status/1113274956765331456?la...
pascalxus 7y ago
Well, the taxes in CA are extremely high. A typical 2M house in the penninsula will pay over 27000/year in taxes and that's not even counting income taxes. That's not even counting all the permiting fees, building fees, and countless other fees that developers need to pay, which are passed on to the consumer, and all the regulations which raise the cost of building in the first place. Perhaps, you meant, we've given up on the ability of government to use those taxes for the greater good. I'd agree with that. for the last 50 years, If even a tiny fraction of those taxes were used to solve all the zoning and building regulations, we'd be in great shape right now.
- jartelt 7y ago
  I think it's more likely that a typical $2M house on the peninsula is paying much less than $27,000/year in property taxes because of prop 13. Only the homes that have been sold in the last ~5 years are actually paying 1% of property value in yearly taxes. Many homes are paying much, much less because they haven't been sold in 20 years and/or were passed down within the family. Or, the owners move out and rent the home and continue to get artificially low property taxes (while increasing rent higher and higher reach year).

rayiner 7y ago

> We've given up on taxation as a means to raise money for the public good. Have we? California's marginal tax rate is over 50%, higher than many European countries. The Internet suggests that someone making $260,000 (200,000 pounds) will pay about 41.5% of their income in taxes in the U.K. https://www.thesalarycalculator.co.uk/salary.php https://www.thesalarycalculator.co.uk/salary.php. Using a similar tax calculator for California suggests that they'd pay about 39%. I assume the U.K. is also in a post-Reagan, post-tax world? Must be Reagan. Couldn't be total mismanagement at all levels of California government.

bildung 7y ago
> California's marginal tax rate was over 50%, Is that really true? This official calculator [1] says I'd have to pay only 16k on 200k income. And this source [2] says income tax tops out at 13.3%. [1] = https://webapp.ftb.ca.gov/TaxCalc/Home/Results https://webapp.ftb.ca.gov/TaxCalc/Home/Results [2] = https://www.communitytax.com/state-taxes/california-taxes/ https://www.communitytax.com/state-taxes/california-taxes/
- shuckles 7y ago
  They mean on top of federal taxes. The right phrasing is probably "The marginal tax rate for a California resident."
- deleted 7y ago
  [deleted]
- jandrewrogers 7y ago
  That is on top of the Federal tax rate. Americans pay into two separate tax systems. It would be like paying taxes to the EU in addition to your country, which is how the US system works.
- kbrackbill 7y ago
  I'm guessing they're talking about the total taxes for someone living in California, including federal and local as well as state.
  - mywittyname 7y ago
    Which is disingenuous, because 75% of those taxes would remain, regardless of where a person lives in the US.
    - zepto 7y ago
      It‘s not disingenuous - the point was that a lot of tax is being collected not that California is special. Tax is comparable to Europe and yet services are not. The problem is therefore the government.
- phamilton 7y ago
  16k on 200k isn't a marginal rate calculation. Top federal rate is 37%, top state rate is 13.3%. Total top marginal rate is 50.3%.
shuckles 7y ago
As a mechanical point: income tax comparisons should also include payroll taxes. It may not flip the analysis here, but payroll taxes tend to be much higher in Europe.
- rayiner 7y ago
  I think the calculator above includes payroll tax (= national insurance tax in the U.K.)
- papln 7y ago
  They should also include health insurance, which they don't in the US, and costs about $10K/yr (with high variance for family size and benefits package), or another 2-4 % on rayiner's example (again, high variance due to # of wage earners).
dmix 7y ago
Bay area tax rates are about the same as living in Toronto, minus the public health insurance. I'm also skeptical a lack of tax money is the root problem here...
Apocryphon 7y ago
The U.K. is in a post-Thatcher world, yes.
dmode 7y ago
This is not remotely true. I make more than that, and my effective tax rate is 27%. This because, US has a very convoluted tax system with a whole bunch of deductions. And both Fed and state tax systems are progressive, so you simply cannot add them up, since only a portion of that is applied to your highest income level. Not factor in property related deductions, health care related deductions, children related deductions, and various investment loopholes.
- rayiner 7y ago
  Note that the 50% figure is marginal tax rate. In California, it’s basically what you pay in your 500,000-th dollar. Which is higher than the 45% you’d pay in the UK. (Though the tax burden is higher in the U.K. unless you make millions because the brackets kick in earlier.) The figure I cited above is from a tax calculator that I’ve found to be pretty accurate. Note that the various deductions are much less valuable for high income earners under Trump’s new tax plan due to the limit on SALT deductions. Finally, while the calculator I used excludes US credits for healthcare, children, etc., the calculator I used for the U.K. also does that. The hypothetical is basically a single Google programmer who rents and has no kids.
  - gamblor956 7y ago
    You are literally just spreading a lie over and over again. CA's top marginal tax rate is 12.3%. If it were >50% no rich person would live in the state. The combined state and federal rate is not >50% either, and any calculator that claims otherwise is lying. And that's before you even take deductions into account. If you're paying >50% marginal tax rate in CA, your accountant should be fired. And possibly investigated for embezzling funds from you in the form of "tax payments."
    - rayiner 7y ago
      I think it’s pretty clear from my post that I’m talking about combined state and federal taxes in California, especially given the comparison to the U.K. which has a single level of income tax. It makes no sense to just look at state taxes, because a lot of federal taxes go back to the state as grants (transit, highway, Medicaid, ACA subsidies, education), or go to pay for social services the state would otherwise have to pay for itself (Medicare, Social Security, food security, etc.) As to the combined marginal rate, it’s 50.75% on labor income above $576,000 (12.3% state, 37% federal, 1.45% Medicare). Then there is a 1% surcharge on incomes over $1 million. I’m not sure why you’re talking about dedications because that won’t affect the top marginal rate.
mattlondon 7y ago
Wow that is a lot closer than I realised. I was always of the assumption that the US tax rate was much lower than the UK and Europe. That 2.5% extra in the UK (so about £5k/$8k a year) includes free healthcare too (plus at £200k you'd almost certainly be in a job that also has excellent private health care for you and your family with no extra payments as well as the free NHS). I understand that this can cost many tens of thousand in the US even before you use it. I just don't get the US system sometimes I really don't. Perhaps instead of calling for SV companies to move elsewhere in the US, why not just come to London or Zurich or Berlin?
gamblor956 7y ago
California's top marginal tax rate is 12.3%. The combined state and federal marginal tax rate does not exceed 50% either.
- toast0 7y ago
  For 2019, the federal top rate is 37% and the California state top tax rate is 13.3%. You'll have hit the SALT deduction cap way before you hit the top marginal rate, so if you get there, you're looking at a marginal rate of 50.3%, which does exceed 50%. Medicare adds another 1.45% as well.
  - gamblor956 7y ago
    Your CA rate is off by 1%, and you're adding additional contingent levies to breach 50%.
triceratops 7y ago
> California's marginal tax rate is over 50% It is not. The top tax bracket (income $1m+) is 13.3%[1]. Where are you getting this number from? 1. https://www.tax-brackets.org/californiataxtable https://www.tax-brackets.org/californiataxtable
- usaar333 7y ago
  GP is obviously referring to the combined fed + state rate in context.
  - triceratops 7y ago
    1. It's not obvious at all. 2. It's slightly disingenuous to call it "California's marginal tax rate" when 2/3 of that figure comes from federal taxes. It's like saying "Texas's marginal tax rate is 37%". 3. The SALT deduction changes have made it so that residents of states with high taxes are effectively double-taxed. California isn't responsible for this state of affairs.

vondur 7y ago

California is one of the states with the highest overall taxes in the US. I don't think it's lack of tax revenue that the problem here.

luckydata 7y ago
not really. California has high INCOME taxes compared to other states but significantly lower real estate taxes, and revenues due to the infamous Prop 13. Commercial real estate is the most significant source of deficits in this state.

graeme 7y ago

This isn't a tax issue. The california govt has made it largely illegal to build new housing. If you restrict supply you get a shortage. You could say california has given up on building cities.

gamblor956 7y ago
This is FUD. Within 10 blocks of where I live more than 30,000 new units are being constructed (or have finished construction) in a 3 year window. That doesn't include the dozen residential buildings of 100+ units I see on my daily commute, or the other dozens of buildings being built along public transportation routes in LA. Long Beach and San Diego have also experienced residential building sprees. The problem is that California is such a desirable place to live that even with all the undesirables leaving the state for the South, we still can't keep up with the growing demand for new housing.
- graeme 7y ago
  I don't live in California. I live in a place with functional zoning laws and no parking minimums. These greatly restrict density in places like LA. This WSJ piece is instructive. Tokyo has seen flat housing prices despite population growth. The secret? Tokyo had a lot more housing starts than NYC or SF. Yes, california attracts new people. A sensible housing market would build more houses to build them. It is not clear how higher taxes would help, unless you think higher japanese tax rates cause their private sector to build more. https://mobile.twitter.com/wsj/status/1113274956765331456?lang=en https://mobile.twitter.com/wsj/status/1113274956765331456?la...

pascalxus 7y ago

Well, the taxes in CA are extremely high. A typical 2M house in the penninsula will pay over 27000/year in taxes and that's not even counting income taxes. That's not even counting all the permiting fees, building fees, and countless other fees that developers need to pay, which are passed on to the consumer, and all the regulations which raise the cost of building in the first place. Perhaps, you meant, we've given up on the ability of government to use those taxes for the greater good. I'd agree with that. for the last 50 years, If even a tiny fraction of those taxes were used to solve all the zoning and building regulations, we'd be in great shape right now.

jartelt 7y ago
I think it's more likely that a typical $2M house on the peninsula is paying much less than $27,000/year in property taxes because of prop 13. Only the homes that have been sold in the last ~5 years are actually paying 1% of property value in yearly taxes. Many homes are paying much, much less because they haven't been sold in 20 years and/or were passed down within the family. Or, the owners move out and rent the home and continue to get artificially low property taxes (while increasing rent higher and higher reach year).