6 ms·

> To hit 55% tax rate in California after this, you only need to make like $250k total. It's a good amount, sure, but if you compare cost of living... it's stil

> To hit 55% tax rate in California after this, you only need to make like $250k total. It's a good amount, sure, but if you compare cost of living... it's still hard to live on. Excuse my ignorance but would you be able to lay out basically how this amount of money is hard to live on?

snicker7 5y ago
Yachts are expensive. And it’s literally impossible to live in Cali without one. What would the neighbors think?
- ch4s3 5y ago
  You’d be hard pressed to buy a 2 bedroom condo in most of California with that income. The places that pay that much have the most expensive housing in the US.
dmitrygr 5y ago
Rents for a small apartment can be around 3000/month. Food in the area is quite expensive. So are things like car maintenance, movie theatres, gasoline, etc. If you live in SF, you'll need to budget 2-3 car break-ins per month and 1-2 catalytic converter thefts per year to deal with. On top of that, CA has a quite high income tax. It adds up fast...
onlyrealcuzzo 5y ago
Renting a nice 1bdrm apartment in a decent neighborhood in SF or LA is going to cost you over $48k per year. Probably closer to $60k. That's close $100k+ pre-tax. Even with a modest spending budget, if you want to max your 401k - which you will need to do to keep this life style in retirement - you're going to need to make $180k. Definitely not "hard to live on". But also, you are decidedly far from rich. $250k - if you are single - you should be able to save a lot and make some investments and have more financial freedom - or more spending, whichever you prefer. Still, you are far from "rich". Even at ~$450k (top 1%), you're going to need several years of savings at that level before you start to feel "rich". Should people feel sorry for you? No. But are you just riding around on yachts and drinking umbrella drinks all day? No.
- jefftk 5y ago
  $48k is $4k monthly; $60k is $5k. While you certainly can pay that much, you don't have to. Take this $2k listing: https://sfbay.craigslist.org/sfc/apa/d/san-francisco-apartment-therapy-sky/7378125615.html https://sfbay.craigslist.org/sfc/apa/d/san-francisco-apartme... Or this $3k one: https://sfbay.craigslist.org/sfc/apa/d/san-francisco-861-post-great-downtown/7377536860.html https://sfbay.craigslist.org/sfc/apa/d/san-francisco-861-pos...
  - thrav 5y ago
    Those are borderline, but they’re pretty close to being fully in the Tenderloin. That’s the roughest and one of the cheapest parts of San Francisco proper.
    - jefftk 5y ago
      Ok, how about these, all $3k: https://sfbay.craigslist.org/sfc/apa/d/san-francisco-all-about-peoples-choices/7377292086.html https://sfbay.craigslist.org/sfc/apa/d/san-francisco-all-abo... https://sfbay.craigslist.org/sfc/apa/d/san-francisco-beautifully-remodeled-bed/7380233101.html https://sfbay.craigslist.org/sfc/apa/d/san-francisco-beautif... https://sfbay.craigslist.org/sfc/apa/d/san-francisco-111-chestnut-613-bay/7374700226.html https://sfbay.craigslist.org/sfc/apa/d/san-francisco-111-che...
      - onlyrealcuzzo 5y ago
        It is possible. These are not terrible apartments, and they're in decent neighborhoods. These probably would've been closer to $3300 or $3600 pre-covid. And they're not particularly great.
        deleted 5y ago
        [deleted]
        Leherenn 5y ago
        Not terrible? The first link is a modern 80m2 flat (sounds huge for 1 bedroom to me) with great facilities right on the sea front. Do you have example of what you would consider good, because it already sounds pretty luxurious to me?
cecilpl2 5y ago
I can't imagine that everyone in California is making >$250k. There must be lots of people making low 6 figures or even gasp 5 figures and still somehow managing to survive.
- b9a2cab5 5y ago
  Because of graduated taxation and government benefits, many of those people making 5 figures receive free or subsidized healthcare and other benefits from the CA government while paying a much lower effective tax rate. Essentially CA is just taxing the middle class but instead of the middle class it's the upper middle class. An actually effective tax would be a wealth tax with no exemptions for all the homeowners sitting on 1000% gains and angrily voting against all new development. Highly taxing high incomes in my opinion _reduces_ socioeconomic mobility, since the wealthy don't pay rents and therefore spend much less than high income earners who are not yet wealthy.
deleted 5y ago
[deleted]
b9a2cab5 5y ago
Perhaps not hard to live on, but it's easy to see how the state taxes away any chance you have to build any semblance of wealth due to the insane cost of living in the Bay. Basic 1 bedroom apartment rent, at least 45min commute or less to Menlo Park/Palo Alto - $4000/mo CalTrain/BART/car insurance/bus/Uber - $1000/mo (this is conservative, since car insurance costs more in the Bay since the DA won't enforce anti-theft laws) Groceries - $400/mo Utilities and phone bill - $400/mo Health insurance - $300/mo Miscellaneous other expenses (e.g. soap, toilet paper, etc.) - $500/mo CA tax bracket for the 57k-295k income range is 9.3%, so your average rate for that 250k is going to be pretty close to 9%. Your effective federal rate under the new tax plan being discussed in Congress right now is going to come in the mid 30's - let's say 32% to be conservative. Social Security adds 6.2%, Medicare another 1.45% under current rates. CA SDI is another 1%. Total effective rate: 49.65%. Post-tax earnings: $125,875 out of $250,000. What about your expenses? Well, if you do the math, the above comes out to $79,200/year. You now have $46,000/year to save towards a house... which oh by the way, costs $1.5M at present day for a shack in Fremont. Oh, and forget about having kids too. Yes, you aren't starving, but considering you're making $250k it's kind of egregious that you aren't able to purchase a run-down house in 30 years from your income. The problem is twofold: the state taxes away half your income so you can't build wealth, and NIMBYs opposing the development of new housing suck away the rest of your income. And before you say we should be focusing on actual poor people first: perhaps consider that the state clearly has the resources for both?
- ryan_lane 5y ago
  Everything in this list is overinflated, or you're really poor at budgeting. A $4k a month 1br is going to be a luxury high rise; not a basic 1br. $1k a month on travel expenses is insane. I never spent more than $400 a month and I used Lyft at least twice a day every day. Health insurance is covered by your employer, unless you're working for a really shitty employer. Also, you don't understand marginal taxes. Please, go read up on them, because anytime you talk to someone who understands them, they're going to think you're an idiot when you start whipping out your calculations.
  - ztratar 5y ago

snicker7 5y ago

Yachts are expensive. And it’s literally impossible to live in Cali without one. What would the neighbors think?

ch4s3 5y ago
You’d be hard pressed to buy a 2 bedroom condo in most of California with that income. The places that pay that much have the most expensive housing in the US.

dmitrygr 5y ago

Rents for a small apartment can be around 3000/month. Food in the area is quite expensive. So are things like car maintenance, movie theatres, gasoline, etc. If you live in SF, you'll need to budget 2-3 car break-ins per month and 1-2 catalytic converter thefts per year to deal with. On top of that, CA has a quite high income tax. It adds up fast...

onlyrealcuzzo 5y ago

Renting a nice 1bdrm apartment in a decent neighborhood in SF or LA is going to cost you over $48k per year. Probably closer to $60k. That's close $100k+ pre-tax. Even with a modest spending budget, if you want to max your 401k - which you will need to do to keep this life style in retirement - you're going to need to make $180k. Definitely not "hard to live on". But also, you are decidedly far from rich. $250k - if you are single - you should be able to save a lot and make some investments and have more financial freedom - or more spending, whichever you prefer. Still, you are far from "rich". Even at ~$450k (top 1%), you're going to need several years of savings at that level before you start to feel "rich". Should people feel sorry for you? No. But are you just riding around on yachts and drinking umbrella drinks all day? No.

jefftk 5y ago
$48k is $4k monthly; $60k is $5k. While you certainly can pay that much, you don't have to. Take this $2k listing: https://sfbay.craigslist.org/sfc/apa/d/san-francisco-apartment-therapy-sky/7378125615.html https://sfbay.craigslist.org/sfc/apa/d/san-francisco-apartme... Or this $3k one: https://sfbay.craigslist.org/sfc/apa/d/san-francisco-861-post-great-downtown/7377536860.html https://sfbay.craigslist.org/sfc/apa/d/san-francisco-861-pos...
- thrav 5y ago
  Those are borderline, but they’re pretty close to being fully in the Tenderloin. That’s the roughest and one of the cheapest parts of San Francisco proper.
  - jefftk 5y ago
    Ok, how about these, all $3k: https://sfbay.craigslist.org/sfc/apa/d/san-francisco-all-about-peoples-choices/7377292086.html https://sfbay.craigslist.org/sfc/apa/d/san-francisco-all-abo... https://sfbay.craigslist.org/sfc/apa/d/san-francisco-beautifully-remodeled-bed/7380233101.html https://sfbay.craigslist.org/sfc/apa/d/san-francisco-beautif... https://sfbay.craigslist.org/sfc/apa/d/san-francisco-111-chestnut-613-bay/7374700226.html https://sfbay.craigslist.org/sfc/apa/d/san-francisco-111-che...
    - onlyrealcuzzo 5y ago
      It is possible. These are not terrible apartments, and they're in decent neighborhoods. These probably would've been closer to $3300 or $3600 pre-covid. And they're not particularly great.
      - deleted 5y ago
        [deleted]
      - Leherenn 5y ago
        Not terrible? The first link is a modern 80m2 flat (sounds huge for 1 bedroom to me) with great facilities right on the sea front. Do you have example of what you would consider good, because it already sounds pretty luxurious to me?

cecilpl2 5y ago

I can't imagine that everyone in California is making >$250k. There must be lots of people making low 6 figures or even gasp 5 figures and still somehow managing to survive.

b9a2cab5 5y ago
Because of graduated taxation and government benefits, many of those people making 5 figures receive free or subsidized healthcare and other benefits from the CA government while paying a much lower effective tax rate. Essentially CA is just taxing the middle class but instead of the middle class it's the upper middle class. An actually effective tax would be a wealth tax with no exemptions for all the homeowners sitting on 1000% gains and angrily voting against all new development. Highly taxing high incomes in my opinion _reduces_ socioeconomic mobility, since the wealthy don't pay rents and therefore spend much less than high income earners who are not yet wealthy.

deleted 5y ago

[deleted]

b9a2cab5 5y ago

Perhaps not hard to live on, but it's easy to see how the state taxes away any chance you have to build any semblance of wealth due to the insane cost of living in the Bay. Basic 1 bedroom apartment rent, at least 45min commute or less to Menlo Park/Palo Alto - $4000/mo CalTrain/BART/car insurance/bus/Uber - $1000/mo (this is conservative, since car insurance costs more in the Bay since the DA won't enforce anti-theft laws) Groceries - $400/mo Utilities and phone bill - $400/mo Health insurance - $300/mo Miscellaneous other expenses (e.g. soap, toilet paper, etc.) - $500/mo CA tax bracket for the 57k-295k income range is 9.3%, so your average rate for that 250k is going to be pretty close to 9%. Your effective federal rate under the new tax plan being discussed in Congress right now is going to come in the mid 30's - let's say 32% to be conservative. Social Security adds 6.2%, Medicare another 1.45% under current rates. CA SDI is another 1%. Total effective rate: 49.65%. Post-tax earnings: $125,875 out of $250,000. What about your expenses? Well, if you do the math, the above comes out to $79,200/year. You now have $46,000/year to save towards a house... which oh by the way, costs $1.5M at present day for a shack in Fremont. Oh, and forget about having kids too. Yes, you aren't starving, but considering you're making $250k it's kind of egregious that you aren't able to purchase a run-down house in 30 years from your income. The problem is twofold: the state taxes away half your income so you can't build wealth, and NIMBYs opposing the development of new housing suck away the rest of your income. And before you say we should be focusing on actual poor people first: perhaps consider that the state clearly has the resources for both?

ryan_lane 5y ago
Everything in this list is overinflated, or you're really poor at budgeting. A $4k a month 1br is going to be a luxury high rise; not a basic 1br. $1k a month on travel expenses is insane. I never spent more than $400 a month and I used Lyft at least twice a day every day. Health insurance is covered by your employer, unless you're working for a really shitty employer. Also, you don't understand marginal taxes. Please, go read up on them, because anytime you talk to someone who understands them, they're going to think you're an idiot when you start whipping out your calculations.
- ztratar 5y ago