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Where are you getting 16% state income tax from? In your median income example of 108k, the top rate for single filer is 9.3%, but that payers effective rate is

by vsef 6y ago

Where are you getting 16% state income tax from? In your median income example of 108k, the top rate for single filer is 9.3%, but that payers effective rate is only 6.6% (summed over all bracket). This is not much higher than Utah's flat 4.95% Even a single filer making $500k/year will only hit a top rate of 11.3%, and effective rate of 9.4%. For surcharges to kick in requires > $1M/year, and only affects the amount over that.

bradlys 6y ago
Probably including the sales tax or something in the figure. Isn’t California one of the worst states in the country for tax burden? I do find it weird that CA has some of the worst taxes for new residents. I can’t imagine a place that is more difficult to break into and then settle in. (High property values, outrageously high property taxes, high sales tax, high income tax, etc...) It’s setup to only let the rich get in and stay. Not a very inclusive place.
- vsef 6y ago
  It still wouldn't make any sense including sales tax. The effect of sales tax on total tax burden scales even less linearly than the steeply progressive CA income tax rates! The more you earn, the smaller % of your income goes to things that are sales taxed. The income tax scale in CA is steeply progressive, a 50k earner pays only 3.8%, less than almost all states that have flat income tax. For a median earner, CA is in the upper half but not exceptionally high: https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494/ https://wallethub.com/edu/states-with-highest-lowest-tax-bur... Having been in very high income brackets myself, lived in both low and high col areas/states, and run this calculation often, I think taxes is largely a red herring. The difference made by tax is just peanuts compared to the impact of housing cost, which truly is very high in CA. For low income brackets, CA is frequently lower tax burden than elsewhere, but housing cost will destroy you. For very high income brackets you do start to see the difference in marginal tax rate, but your absolute income is so much higher that you aren't spending a significant % on sales tax, and those marginal differences aren't driving your decision making anymore.
deleted 6y ago
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by vsef 6y ago

bradlys 6y ago

Probably including the sales tax or something in the figure. Isn’t California one of the worst states in the country for tax burden? I do find it weird that CA has some of the worst taxes for new residents. I can’t imagine a place that is more difficult to break into and then settle in. (High property values, outrageously high property taxes, high sales tax, high income tax, etc...) It’s setup to only let the rich get in and stay. Not a very inclusive place.

vsef 6y ago
It still wouldn't make any sense including sales tax. The effect of sales tax on total tax burden scales even less linearly than the steeply progressive CA income tax rates! The more you earn, the smaller % of your income goes to things that are sales taxed. The income tax scale in CA is steeply progressive, a 50k earner pays only 3.8%, less than almost all states that have flat income tax. For a median earner, CA is in the upper half but not exceptionally high: https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494/ https://wallethub.com/edu/states-with-highest-lowest-tax-bur... Having been in very high income brackets myself, lived in both low and high col areas/states, and run this calculation often, I think taxes is largely a red herring. The difference made by tax is just peanuts compared to the impact of housing cost, which truly is very high in CA. For low income brackets, CA is frequently lower tax burden than elsewhere, but housing cost will destroy you. For very high income brackets you do start to see the difference in marginal tax rate, but your absolute income is so much higher that you aren't spending a significant % on sales tax, and those marginal differences aren't driving your decision making anymore.

deleted 6y ago

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