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Tangent: Your 5% guesstimation is wildly off. In the USA alone, assuming 50% of your bonuses go to taxation, your 300k income is going to put you in the top 2%

Tangent: Your 5% guesstimation is wildly off. In the USA alone, assuming 50% of your bonuses go to taxation, your 300k income is going to put you in the top 2% of earners. Globally, 300k USD income would put you in the top .2%, so you're richer than 998 out of every 1000 other people in the globe.

thebean11 5y ago
> In the USA alone, assuming 50% of your bonuses go to taxation 50% of bonuses? That seems low, it's closer to 50% of total comp (maybe 40-45) in the places where these salaries are common.
- whack 5y ago
  The federal tax brackets are the same everywhere you go. If you're married and making 350k, most of your income will fall in the ~23% tax bracket. And a small portion will be taxed at 32%. The main variable is state taxes. If you're living in California, most of your income will be taxed at ~9.3%. With a small portion taxed at 10.3%. So your marginal tax rate will be 43%, and your overall tax rate will be closer to ~33%. Nit: USA does not tax bonuses any differently from salary. They are both interchangeable, when computing taxes. Also, all income-percentile metrics in USA are based on pre-tax income, not post-tax. https://taxfoundation.org/publications/federal-tax-rates-and-tax-brackets/ https://taxfoundation.org/publications/federal-tax-rates-and... https://www.nerdwallet.com/article/taxes/california-state-tax https://www.nerdwallet.com/article/taxes/california-state-ta...
  - thebean11 5y ago
    I'm seeing 38% effective tax rate with 300k in CA all things considered. But anyway I agree, 50% of bonus doesn't reflect the total amount or the way things are taxed.
- 6gvONxR4sf7o 5y ago
  Since silicon valley is in california, yeah you're probably paying about 39% to taxes, leaving you $212k of your $350k. (using this tax calculator https://smartasset.com/taxes/california-tax-calculator#zj8lo3i5Tv https://smartasset.com/taxes/california-tax-calculator#zj8lo...)
scsilver 5y ago
Dont for one second think that if you only have a large income, you are rich. Earning potential is not earnings, and wealth/richness is accrued earnings. You'd be amazed at how much wealth that some people have isn't being produced by production, its their assets going up in value. They don't realize that value yearly. Look at wealth in global real estate for a touchstone. https://www.visualcapitalist.com/all-of-the-worlds-money-and-markets-in-one-visualization-2020/ https://www.visualcapitalist.com/all-of-the-worlds-money-and...
- WhompingWindows 5y ago
  I'm responding to the parent, who states "earners" which means income, not wealth. I may agree that someone with 300k may lose 40% to taxes, then they spend 1/3 of what's remaining on expensive housing, another few hundred on student loans and a new car payment-- suffice to say, life can be very expensive for those in SV or SF or NYC. But still, having 300k coming in pre-tax earnings puts you in the top 0.2% of earners globally, not 5%, which was the original point in question. Why do I stress this point? Because we need to realize we're not just the top 5% here on this forum. Globally speaking, we range from well-off to EXTREMELY well off, and we should have the humility to post the proper stats about ourselves.

thebean11 5y ago

> In the USA alone, assuming 50% of your bonuses go to taxation 50% of bonuses? That seems low, it's closer to 50% of total comp (maybe 40-45) in the places where these salaries are common.

whack 5y ago
The federal tax brackets are the same everywhere you go. If you're married and making 350k, most of your income will fall in the ~23% tax bracket. And a small portion will be taxed at 32%. The main variable is state taxes. If you're living in California, most of your income will be taxed at ~9.3%. With a small portion taxed at 10.3%. So your marginal tax rate will be 43%, and your overall tax rate will be closer to ~33%. Nit: USA does not tax bonuses any differently from salary. They are both interchangeable, when computing taxes. Also, all income-percentile metrics in USA are based on pre-tax income, not post-tax. https://taxfoundation.org/publications/federal-tax-rates-and-tax-brackets/ https://taxfoundation.org/publications/federal-tax-rates-and... https://www.nerdwallet.com/article/taxes/california-state-tax https://www.nerdwallet.com/article/taxes/california-state-ta...
- thebean11 5y ago
  I'm seeing 38% effective tax rate with 300k in CA all things considered. But anyway I agree, 50% of bonus doesn't reflect the total amount or the way things are taxed.
6gvONxR4sf7o 5y ago
Since silicon valley is in california, yeah you're probably paying about 39% to taxes, leaving you $212k of your $350k. (using this tax calculator https://smartasset.com/taxes/california-tax-calculator#zj8lo3i5Tv https://smartasset.com/taxes/california-tax-calculator#zj8lo...)

scsilver 5y ago

Dont for one second think that if you only have a large income, you are rich. Earning potential is not earnings, and wealth/richness is accrued earnings. You'd be amazed at how much wealth that some people have isn't being produced by production, its their assets going up in value. They don't realize that value yearly. Look at wealth in global real estate for a touchstone. https://www.visualcapitalist.com/all-of-the-worlds-money-and-markets-in-one-visualization-2020/ https://www.visualcapitalist.com/all-of-the-worlds-money-and...

WhompingWindows 5y ago
I'm responding to the parent, who states "earners" which means income, not wealth. I may agree that someone with 300k may lose 40% to taxes, then they spend 1/3 of what's remaining on expensive housing, another few hundred on student loans and a new car payment-- suffice to say, life can be very expensive for those in SV or SF or NYC. But still, having 300k coming in pre-tax earnings puts you in the top 0.2% of earners globally, not 5%, which was the original point in question. Why do I stress this point? Because we need to realize we're not just the top 5% here on this forum. Globally speaking, we range from well-off to EXTREMELY well off, and we should have the humility to post the proper stats about ourselves.