6 ms·

To start with - the top 1% is a relatively accessible level of "rich." That's an L5/L6 software engineer at Google, or a mid career doctor. Are offshore tax sh

by okprod 6y ago

To start with - the top 1% is a relatively accessible level of "rich." That's an L5/L6 software engineer at Google, or a mid career doctor. Are offshore tax shelters actually available and economically feasible to these people? The article's use of $200K is very weird, and the top 1%-5% definitely make much more than that (and they don't depend on an annual income/salary). $200K after taxes is not that much, especially if you have a house, more than one car, children, student loan debt, want to save, etc. I don't know of anyone at $200K or even more to be involved in any sort of offshore tax shelters. As for pass-through businesses: I had a pass-through LLC when I ran a consultancy. Was I engaged in tax evasion? I'm pretty sure I wasn't - as I understood, this was exactly what I was supposed to be doing. Pass-through isn't tax evasion, but as an example opposite to yours, I used to know someone who created an LLC and then bought things as LLC expenses (like computers, printers, etc) that were really for personal use. Edit: I have no idea how to quote text on HN

bumby 6y ago
>$200K after taxes is not that much, especially if you have a house, more than one car, children, student loan debt, want to save, etc. I understand your point, particularly if you are referencing a high COL area like SV. But this reads as a bit tone deaf when the median salary in the US is a shade under $40k/yr [1] [1] https://usafacts.org/data/topics/economy/jobs-and-income/jobs-and-wages/median-annual-wage/?utm_source=google&utm_medium=cpc&utm_campaign=ND-Jobs&gclid=CjwKCAjwjbCDBhAwEiwAiudBy7Nx6TrHdDScb4UZpeqnWaxN6jus5W6EvlBkF4CpzoYUSZCnvEhToxoC518QAvD_BwE https://usafacts.org/data/topics/economy/jobs-and-income/job...
- burlesona 6y ago
  Honestly I think a global or national percentile is not very informative. If you make $40k in a small town, you’re doing okay. If you make $80k in a mid-major city like Indianapolis or Raleigh, you’re doing okay. If you make $160k in San Francisco you’re doing okay. From my own life experience, all of those feel like about the same amount of purchasing power after you’ve paid your bills. However if you’re making $40k in SF your housing situation is borderline desperate. At $80k you’re just scraping by. The US has really fractured into a few different economies, and it’s as hard to make comparisons of income, wealth, and quality of life between San Francisco and rural Kansas as it is to make comparisons between the rural US and rural Guatemala (or any number of other countries).
  - bumby 6y ago
    I agree 100%. That’s why I don’t think statements like “$X amount is really not that much” are very useful. In many places in the US $200k is doing really, really well. Sometimes those arguments are still used in those areas, but I think it says more about lifestyle inflation than the ability to live on that income. (E.g., it’s not much IF you get a new car every few years and IF you have a mortgage on a 4K Sqft home and IF you send your kids to private school). The tone deaf comment relates to how those self-imposed lifestyle constraints are out of touch for most people anyway.
- beardedetim 6y ago
  I don’t see an issue with saying both that $200k is not that much and that the median salary in the US is ABSOLUTELY TOO LOW. Both can be true and not tone deaf. Do you disagree? Or put another way: why did you find the comment tone deaf?
  - bumby 6y ago
    It can potentially be true but probably only to a certain extent. I find it tone deaf because the vast majority of people are getting by on much, much less. Which means almost by definition, it IS quite a bit. So to say it isn’t much comes across as oblivious to the way most people live, and potentially not aware of the problems that the average person faces. Would you complain to a person in a wheelchair about how bad it sucks to have to take the stairs to work even though it may still be true? Giving the OP the benefit of the doubt, it may be COL dependent. But even in SV, $200k is nearly double the median household income and nearly 4x the median personal income. It reminds me of an article I read during the financial crises of 2007-2009 written by someone who was making the case that being a one-percenter doesn’t mean you have lots of money. She then later described her new Lexus payment, costs of private school, oversized mortgage etc. Both can be true iff that is considered a reasonable lifestyle for the average person. To be generous to the OP, the average way an American lives is probably not the best measuring stick (e.g., something like 60+% can’t meet an unexpected $500 bill. However, just like the OPs statement, I tend to think this is related more to lifestyle choices)
    - beardedetim 6y ago
      That makes total sense. I disagree with your takeaway but it seems like a valid one to have. From my experience coming from homelessness type of poverty to making 6 figures, I have access to many things and don’t have to worry about food anymore. But. I still don’t have enough savings to live off of if I lose my job, am still one serious accident away from bankruptcy, etc. the way I’ve explained it is that I now have something to lose, not that I’ve gained all that much outside of benefits (I now have two front teeth!) Maybe the point I’m trying to make with my anecdote is that making $$$ isn’t the same as having $$$, high CoL or not.
alistairSH 6y ago
Top 1% in the US is a hair over $500k/year. https://www.usatoday.com/story/money/2020/07/01/how-much-you-need-to-make-to-be-in-the-1-in-every-state/112002276/ https://www.usatoday.com/story/money/2020/07/01/how-much-you... Top 5% is around $160k/year. Those are both household numbers. So, the top 1% wouldn't be unusual for a couple in mid-career working for a FAANG on the West Coast. But, definitely not normal or easy, especially anywhere else in the country. Top 5% would be just about any dual-income, white-collar household in a reasonably sized metro area.
alistairSH 6y ago
Pass-through isn't tax evasion, but as an example opposite to yours, I used to know someone who created an LLC and then bought things as LLC expenses (like computers, printers, etc) that were really for personal use. Not necessarily a pass-through technique, but the example that pops to mind is the tax treatment of vehicles over 6500lbs GVWR. It's a major incentive for any business owner to over-spend on luxury SUVs when either a nice sedan (realtor, sales people, etc entertaining clients) or a smaller van/truck (many painters, florists, etc) would be more than sufficient.

by okprod 6y ago

bumby 6y ago

>$200K after taxes is not that much, especially if you have a house, more than one car, children, student loan debt, want to save, etc. I understand your point, particularly if you are referencing a high COL area like SV. But this reads as a bit tone deaf when the median salary in the US is a shade under $40k/yr [1] [1] https://usafacts.org/data/topics/economy/jobs-and-income/jobs-and-wages/median-annual-wage/?utm_source=google&utm_medium=cpc&utm_campaign=ND-Jobs&gclid=CjwKCAjwjbCDBhAwEiwAiudBy7Nx6TrHdDScb4UZpeqnWaxN6jus5W6EvlBkF4CpzoYUSZCnvEhToxoC518QAvD_BwE https://usafacts.org/data/topics/economy/jobs-and-income/job...

burlesona 6y ago
Honestly I think a global or national percentile is not very informative. If you make $40k in a small town, you’re doing okay. If you make $80k in a mid-major city like Indianapolis or Raleigh, you’re doing okay. If you make $160k in San Francisco you’re doing okay. From my own life experience, all of those feel like about the same amount of purchasing power after you’ve paid your bills. However if you’re making $40k in SF your housing situation is borderline desperate. At $80k you’re just scraping by. The US has really fractured into a few different economies, and it’s as hard to make comparisons of income, wealth, and quality of life between San Francisco and rural Kansas as it is to make comparisons between the rural US and rural Guatemala (or any number of other countries).
- bumby 6y ago
  I agree 100%. That’s why I don’t think statements like “$X amount is really not that much” are very useful. In many places in the US $200k is doing really, really well. Sometimes those arguments are still used in those areas, but I think it says more about lifestyle inflation than the ability to live on that income. (E.g., it’s not much IF you get a new car every few years and IF you have a mortgage on a 4K Sqft home and IF you send your kids to private school). The tone deaf comment relates to how those self-imposed lifestyle constraints are out of touch for most people anyway.
beardedetim 6y ago
I don’t see an issue with saying both that $200k is not that much and that the median salary in the US is ABSOLUTELY TOO LOW. Both can be true and not tone deaf. Do you disagree? Or put another way: why did you find the comment tone deaf?
- bumby 6y ago
  It can potentially be true but probably only to a certain extent. I find it tone deaf because the vast majority of people are getting by on much, much less. Which means almost by definition, it IS quite a bit. So to say it isn’t much comes across as oblivious to the way most people live, and potentially not aware of the problems that the average person faces. Would you complain to a person in a wheelchair about how bad it sucks to have to take the stairs to work even though it may still be true? Giving the OP the benefit of the doubt, it may be COL dependent. But even in SV, $200k is nearly double the median household income and nearly 4x the median personal income. It reminds me of an article I read during the financial crises of 2007-2009 written by someone who was making the case that being a one-percenter doesn’t mean you have lots of money. She then later described her new Lexus payment, costs of private school, oversized mortgage etc. Both can be true iff that is considered a reasonable lifestyle for the average person. To be generous to the OP, the average way an American lives is probably not the best measuring stick (e.g., something like 60+% can’t meet an unexpected $500 bill. However, just like the OPs statement, I tend to think this is related more to lifestyle choices)
  - beardedetim 6y ago
    That makes total sense. I disagree with your takeaway but it seems like a valid one to have. From my experience coming from homelessness type of poverty to making 6 figures, I have access to many things and don’t have to worry about food anymore. But. I still don’t have enough savings to live off of if I lose my job, am still one serious accident away from bankruptcy, etc. the way I’ve explained it is that I now have something to lose, not that I’ve gained all that much outside of benefits (I now have two front teeth!) Maybe the point I’m trying to make with my anecdote is that making $$$ isn’t the same as having $$$, high CoL or not.

alistairSH 6y ago

Top 1% in the US is a hair over $500k/year. https://www.usatoday.com/story/money/2020/07/01/how-much-you-need-to-make-to-be-in-the-1-in-every-state/112002276/ https://www.usatoday.com/story/money/2020/07/01/how-much-you... Top 5% is around $160k/year. Those are both household numbers. So, the top 1% wouldn't be unusual for a couple in mid-career working for a FAANG on the West Coast. But, definitely not normal or easy, especially anywhere else in the country. Top 5% would be just about any dual-income, white-collar household in a reasonably sized metro area.

alistairSH 6y ago

Pass-through isn't tax evasion, but as an example opposite to yours, I used to know someone who created an LLC and then bought things as LLC expenses (like computers, printers, etc) that were really for personal use. Not necessarily a pass-through technique, but the example that pops to mind is the tax treatment of vehicles over 6500lbs GVWR. It's a major incentive for any business owner to over-spend on luxury SUVs when either a nice sedan (realtor, sales people, etc entertaining clients) or a smaller van/truck (many painters, florists, etc) would be more than sufficient.