22 ms·

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

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
  I would argue it's not inflated at all. $400 a month for groceries? In SF? A single meal at an "affordable" restaurant is often $30 after tip.
  - Kbelicius 5y ago
    > A single meal at an "affordable" restaurant is often $30 after tip. I've never considered nor seen anybody counting eating out as groceries. Is that normal?
    - Peritract 5y ago
      No.
    - UncleMeat 5y ago
      It is a great way to inflate budgets if you want to demonstrate that it is impossible to live in the bay without making seven figures. We see this pretty consistently in media where crocodile tears are shed over a family making 500k and barely able to keep it together but you look at the budget and they are saving 80k in retirement and spending 20k on travel or whatever.
  - deleted 5y ago
    [deleted]
- b9a2cab5 5y ago
  I quoted the effective tax rate. The marginal rates are higher. Federal marginal rate at 250k under the new proposed tax plan is 35%, excluding Medicare and Social Security. CA's marginal rate at 250k is 9.3%. All of the numbers I quoted are lower than that. Maybe try to understand that your taxes are composed of more than just federal+state and that Medicare+Social Security+CA SDI actually adds a substantial amount? > luxury high rise Have you seen real estate prices recently? Luxury high rise has you paying much more than 4k if you're anywhere close to a good neighborhood. And if you're trying to argue you can spend 2k to live in a 1930s apartment in the Tenderloin while making $250k, I think you're too far in the echo chamber to have your mind changed. > Health insurance is covered by your employer This is in the context of startups, so no, it's not. The employer will subsidize it but it isn't free.
lmm 5y ago
> 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. $46,000/year is a decent pre-tax annual household income in most of the country, and saving 20% of your income is doing very well for yourself. If you're putting that much away even after those inflated expenses (are you seriously paying $50/working day for your commute?) you're in no position to complain about your tax rates. The bay-area housing situation sucks, but that doesn't mean you're entitled to take out of the tax fund.
- hamandcheese 5y ago
  > If you're putting that much away even after those inflated expenses (are you seriously paying $50/working day for your commute?) you're in no position to complain about your tax rates. Ahh the classic “well you aren’t poor so you don’t get to complain”. Can we not aspire to have a middle class in this country?
  - lmm 5y ago
    Apparently we can't, because part of the social contract of a middle class is that they're happy to pay 50%-ish tax rates.
    - SamoyedFurFluff 5y ago
      *marginal tax rates on every dollar earned above 250k
  - barbazoo 5y ago
    I would consider $46,000/year in savings to be very, very far from poor. And that's with a budget many consider to be inflated.
    - b9a2cab5 5y ago
      I would consider being unable to purchase a rundown house in a mediocre location after 30 years of saving from a high income to be pretty bad. You obviously aren't poor but it's not exactly a good situation to be in.
ohashi 5y ago
Your argument about tough to live is that you have more DISPOSABLE income than >40% of the country has total income.
ahtihn 5y ago
46k / year in savings is "hard to live on". What a joke.
UncleMeat 5y ago
> Basic 1 bedroom apartment rent, at least 45min commute or less to Menlo Park/Palo Alto - $4000/mo I lived in a "luxury" 2br apartment that was 20m from Palo Alto just a few years ago for $4000. My 1br prior to that was $2250. > CalTrain/BART/car insurance/bus/Uber - $1000/mo But you live a shortish commute away. Why do you need CalTrain and Uber? Where is car insurance costing $12,000 a year? > Utilities and phone bill - $400/mo Huh? Power, water, trash, cell phone, and internet came to roughly $200/mo for two people when I was in the bay.
imtringued 5y ago
It's easy to inflate bills by pretending what you are getting is the bare minimum while paying premium prices.

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
I would argue it's not inflated at all. $400 a month for groceries? In SF? A single meal at an "affordable" restaurant is often $30 after tip.
- Kbelicius 5y ago
  > A single meal at an "affordable" restaurant is often $30 after tip. I've never considered nor seen anybody counting eating out as groceries. Is that normal?
  - Peritract 5y ago
    No.
  - UncleMeat 5y ago
    It is a great way to inflate budgets if you want to demonstrate that it is impossible to live in the bay without making seven figures. We see this pretty consistently in media where crocodile tears are shed over a family making 500k and barely able to keep it together but you look at the budget and they are saving 80k in retirement and spending 20k on travel or whatever.
- deleted 5y ago
  [deleted]
b9a2cab5 5y ago
I quoted the effective tax rate. The marginal rates are higher. Federal marginal rate at 250k under the new proposed tax plan is 35%, excluding Medicare and Social Security. CA's marginal rate at 250k is 9.3%. All of the numbers I quoted are lower than that. Maybe try to understand that your taxes are composed of more than just federal+state and that Medicare+Social Security+CA SDI actually adds a substantial amount? > luxury high rise Have you seen real estate prices recently? Luxury high rise has you paying much more than 4k if you're anywhere close to a good neighborhood. And if you're trying to argue you can spend 2k to live in a 1930s apartment in the Tenderloin while making $250k, I think you're too far in the echo chamber to have your mind changed. > Health insurance is covered by your employer This is in the context of startups, so no, it's not. The employer will subsidize it but it isn't free.

lmm 5y ago

> 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. $46,000/year is a decent pre-tax annual household income in most of the country, and saving 20% of your income is doing very well for yourself. If you're putting that much away even after those inflated expenses (are you seriously paying $50/working day for your commute?) you're in no position to complain about your tax rates. The bay-area housing situation sucks, but that doesn't mean you're entitled to take out of the tax fund.

hamandcheese 5y ago
> If you're putting that much away even after those inflated expenses (are you seriously paying $50/working day for your commute?) you're in no position to complain about your tax rates. Ahh the classic “well you aren’t poor so you don’t get to complain”. Can we not aspire to have a middle class in this country?
- lmm 5y ago
  Apparently we can't, because part of the social contract of a middle class is that they're happy to pay 50%-ish tax rates.
  - SamoyedFurFluff 5y ago
    *marginal tax rates on every dollar earned above 250k
- barbazoo 5y ago
  I would consider $46,000/year in savings to be very, very far from poor. And that's with a budget many consider to be inflated.
  - b9a2cab5 5y ago
    I would consider being unable to purchase a rundown house in a mediocre location after 30 years of saving from a high income to be pretty bad. You obviously aren't poor but it's not exactly a good situation to be in.

ohashi 5y ago

Your argument about tough to live is that you have more DISPOSABLE income than >40% of the country has total income.

ahtihn 5y ago

46k / year in savings is "hard to live on". What a joke.

UncleMeat 5y ago

> Basic 1 bedroom apartment rent, at least 45min commute or less to Menlo Park/Palo Alto - $4000/mo I lived in a "luxury" 2br apartment that was 20m from Palo Alto just a few years ago for $4000. My 1br prior to that was $2250. > CalTrain/BART/car insurance/bus/Uber - $1000/mo But you live a shortish commute away. Why do you need CalTrain and Uber? Where is car insurance costing $12,000 a year? > Utilities and phone bill - $400/mo Huh? Power, water, trash, cell phone, and internet came to roughly $200/mo for two people when I was in the bay.

imtringued 5y ago

It's easy to inflate bills by pretending what you are getting is the bare minimum while paying premium prices.