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When I was a new grad moving to the US and deciding where to live and work, the biggest draw of Seattle was its lack of income tax. Of course this particular $1

When I was a new grad moving to the US and deciding where to live and work, the biggest draw of Seattle was its lack of income tax. Of course this particular $1 million threshold wouldn't apply to me until I'm very late in my career, or have a lucky year, or get married to a high-income person (the $1 million threshold applies to married couples, not just individuals) but Seattle loses a lot of its appeal if it's not financially advantageous. Of the other tech hubs, SF beats Seattle on weather and jobs and New York beats it on urban lifestyle. Or if you want to avoid income taxes, why not go to Florida or Texas. I wonder if introducing income taxes will impact Seattle's tech hub status going forward. Sometimes people talk about how much these measures will lead to rich people moving away, but discouraging high-income people from moving there I think is a bigger long-term impact.

ambicapter 7mo ago
The assumption of course being that high-income people moving in is good for everyone.
- garbawarb 7mo ago
  Who are the "good" immigrants? It's a topic that's been talked about a lot recently but most countries, and I imagine states too, prefer that people with more money or income potential move there versus people with less.
- deleted 7mo ago
  [deleted]
- pc86 7mo ago
  If I had to choose I'd probably pick a neighbor who makes 3x what I do than 1/3. But I don't think it matters at all.
  - hectdev 7mo ago
    I'm just being snarky here but wouldn't you be concerned that the 3x neighbor would view you as you view the 1/3rd neighbor?
    - pc86 7mo ago
      Yes but they chose to move next to me, not vice versa ;)
hectdev 7mo ago
I live in Texas. People move here and are flabbergasted by our property taxes.
- HardCodedBias 7mo ago
  AI says: TX: Average Effective Rate: Approximately 1.36% to 1.6% (some estimates range up to 1.8%) of a property's assessed fair market value. The typical homeowner in Texas pays a median annual property tax of $4,108 WA: Effective Rate: The average effective property tax rate in Washington is approximately 0.75% to 0.79% of the home's value. State mean the median annual property tax payment is roughly $4,361 to $4,729
  - hectdev 7mo ago
    Take this into account. People move from places with high cost of living where their 2 bedroom house nets them easily $1mil. They sell that and move to Austin where they can afford a much bigger house. They think they win not paying income tax and then their property tax bill drops and they are paying $16k per year. Enter the flabbergast.
    - pclmulqdq 7mo ago
      $16k per year in total taxes is very cheap for someone with a $1 million house and the income to support it.
      - hectdev 7mo ago
        It's more nuanced than that. Say someone moves from California where their property taxes were based on the purchase price of the home, they then buy a home in Austin where it based on the property value and they size up. It is a sticker shock of the taxes. Not justifying it, it is just a reality of what happens here.
      - tzs 7mo ago
        If the house is paid off it can be a lot cheaper to support it than you probably expect. For example my house is paid off. My total yearly spending comes out to under $25k/year. That omits irregular things like the occasional need to replace a broken appliance, or upgrade to a new computer/phone/tablet/watch, or get a new car. Looking at how often those irregular things happen and how much they cost, another $7k a year reserved for that would be sufficient, assuming in any years where that is not spent the left over is carried forward. That's $32k/year income needed to live comfortably in my house. My house is worth a little less than half a million according to Zillow. I'd guess a million dollar house would cost about twice as much to insure, and is bigger so costs more to heat or cool. Assuming 2x insurance and 2x electricity costs would add another $3k, suggesting $35k/year income needed for a million dollar house, at least if my standard of living is acceptable.
SecretDreams 7mo ago
> The tax would apply only on the amount of income above the $1 million threshold, so a person making $1.5 million, for example, would be taxed on the final $500,000. It would apply to an estimated 20,000 to 30,000 households in the state, with collections beginning in 2029 on the previous year’s income. It's a sliding scale tax. Someone making a million will barely feel it. Someone making 50 million will feel it a lot. Objectively, anyone making $50 million should feel it a lot and be taxed heavily. Nobody is making $50 million under their own power. I know numbers are hard for the ultra rich. I've mostly only posted this for all the poor souls only making a mil a year. I want them to know this won't impact them.
- rayiner 7mo ago
  > Objectively, anyone making $50 million should feel it a lot and be taxed heavily. Nobody is making $50 million under their own power You’ve got it backwards. The people making $50,000 are the ones who are dependent on someone else to provide all the infrastructure for their job.
  - SecretDreams 7mo ago
    Ah yes, all the 50k makers are dependent on the very altruistic nature of the 50mil earners who all got there under their own power and without any systematic abuse, grifting, or generational wealth to get them going. Won't anyone think of these poor folks? They'll now have 49x0.099 mil less yearly income to charitably pay their indebted employees bonuses.
    - deleted 7mo ago
      [deleted]
  - abracadaniel 7mo ago
    The person earning $50m a year is profiting on the labor of hundreds of thousands of people. Rent seeking on their labor and skills, relying 100,000x more on the infrastructure that made them rich. No one makes $50m a year in a vacuum, they do so by utilizing the economy they live in and rely on.
nicpottier 7mo ago
Maybe that's a good thing? I miss the Seattle of the 2000s that was less overflowing with tech and more a mix of incomes. I for one support the tax. The dichotomy of being a liberal state with a regressive tax structure needs to stop. Slippery slope argument aside this tax is a good first step. Income tax while imperfect seems to be the best system we have to tax the rich and not the poor.
- phyzix5761 7mo ago
  The rich don't tend to have much income to tax (proportionally). The bulk of their wealth increase per year comes from capital gains.
  - thewebguyd 7mo ago
    Washington also has a capital gains tax now, 7% on long-term capital gains above $270k, and 9.9% on gains above $1 million, exempting real estate and retirement accounts.
dragonwriter 7mo ago
Raising income taxes for those making over $1 million while cutting taxes paid by people making under $1 million makes it cheaper (in employer cost for the same disposable income; looked at a different way, it provides more disposable income for the same nominal pay) to hire workers across most of the income spectrum of any industry (even in tech—most workers in the field aren’t making over $1 million/yr).
- pc86 7mo ago
  The only people making more than $1M in W2 income are in fields where nearly everyone is going to be making that. Highly specialized physicians come to mind pretty quickly but I'm sure there are "lots of" (relatively speaking) attorneys making that too, and probably some other fields where it's more doable than something like tech or sales. There is no way this meaningfully changes the income distribution of hires in any industry.
  - dragonwriter 7mo ago
    I didn't say it changed the income distribution within thr industry, I said it made hiring for the vast majority of roles less expensive in terms of disposable income provided (or, holding nominal pay constant, provides greater disposable income at the same pay.) That is, its not a negative economic incentive except for people who have a very large amount of income taxed as regular income where that income is not dependent on the ability to have other people with more normal incomes working in close proximity.
    - pc86 7mo ago
      Sorry for misunderstanding, yeah I think we're on the same page on that point.
  - lostmsu 7mo ago
    This tax will affect about 1 in 10 new Meta hires in WA: https://www.levels.fyi/companies/meta/salaries/software-engineer?dma=819 https://www.levels.fyi/companies/meta/salaries/software-engi..., probably 2 in 10 currently employed ones. More if you consider families with 2 working SDEs (not uncommon).

ambicapter 7mo ago

The assumption of course being that high-income people moving in is good for everyone.

garbawarb 7mo ago
Who are the "good" immigrants? It's a topic that's been talked about a lot recently but most countries, and I imagine states too, prefer that people with more money or income potential move there versus people with less.
deleted 7mo ago
[deleted]
pc86 7mo ago
If I had to choose I'd probably pick a neighbor who makes 3x what I do than 1/3. But I don't think it matters at all.
- hectdev 7mo ago
  I'm just being snarky here but wouldn't you be concerned that the 3x neighbor would view you as you view the 1/3rd neighbor?
  - pc86 7mo ago
    Yes but they chose to move next to me, not vice versa ;)

hectdev 7mo ago

I live in Texas. People move here and are flabbergasted by our property taxes.

HardCodedBias 7mo ago
AI says: TX: Average Effective Rate: Approximately 1.36% to 1.6% (some estimates range up to 1.8%) of a property's assessed fair market value. The typical homeowner in Texas pays a median annual property tax of $4,108 WA: Effective Rate: The average effective property tax rate in Washington is approximately 0.75% to 0.79% of the home's value. State mean the median annual property tax payment is roughly $4,361 to $4,729
- hectdev 7mo ago
  Take this into account. People move from places with high cost of living where their 2 bedroom house nets them easily $1mil. They sell that and move to Austin where they can afford a much bigger house. They think they win not paying income tax and then their property tax bill drops and they are paying $16k per year. Enter the flabbergast.
  - pclmulqdq 7mo ago
    $16k per year in total taxes is very cheap for someone with a $1 million house and the income to support it.
    - hectdev 7mo ago
      It's more nuanced than that. Say someone moves from California where their property taxes were based on the purchase price of the home, they then buy a home in Austin where it based on the property value and they size up. It is a sticker shock of the taxes. Not justifying it, it is just a reality of what happens here.
    - tzs 7mo ago
      If the house is paid off it can be a lot cheaper to support it than you probably expect. For example my house is paid off. My total yearly spending comes out to under $25k/year. That omits irregular things like the occasional need to replace a broken appliance, or upgrade to a new computer/phone/tablet/watch, or get a new car. Looking at how often those irregular things happen and how much they cost, another $7k a year reserved for that would be sufficient, assuming in any years where that is not spent the left over is carried forward. That's $32k/year income needed to live comfortably in my house. My house is worth a little less than half a million according to Zillow. I'd guess a million dollar house would cost about twice as much to insure, and is bigger so costs more to heat or cool. Assuming 2x insurance and 2x electricity costs would add another $3k, suggesting $35k/year income needed for a million dollar house, at least if my standard of living is acceptable.

SecretDreams 7mo ago

> The tax would apply only on the amount of income above the $1 million threshold, so a person making $1.5 million, for example, would be taxed on the final $500,000. It would apply to an estimated 20,000 to 30,000 households in the state, with collections beginning in 2029 on the previous year’s income. It's a sliding scale tax. Someone making a million will barely feel it. Someone making 50 million will feel it a lot. Objectively, anyone making $50 million should feel it a lot and be taxed heavily. Nobody is making $50 million under their own power. I know numbers are hard for the ultra rich. I've mostly only posted this for all the poor souls only making a mil a year. I want them to know this won't impact them.

rayiner 7mo ago
> Objectively, anyone making $50 million should feel it a lot and be taxed heavily. Nobody is making $50 million under their own power You’ve got it backwards. The people making $50,000 are the ones who are dependent on someone else to provide all the infrastructure for their job.
- SecretDreams 7mo ago
  Ah yes, all the 50k makers are dependent on the very altruistic nature of the 50mil earners who all got there under their own power and without any systematic abuse, grifting, or generational wealth to get them going. Won't anyone think of these poor folks? They'll now have 49x0.099 mil less yearly income to charitably pay their indebted employees bonuses.
  - deleted 7mo ago
    [deleted]
- abracadaniel 7mo ago
  The person earning $50m a year is profiting on the labor of hundreds of thousands of people. Rent seeking on their labor and skills, relying 100,000x more on the infrastructure that made them rich. No one makes $50m a year in a vacuum, they do so by utilizing the economy they live in and rely on.

nicpottier 7mo ago

Maybe that's a good thing? I miss the Seattle of the 2000s that was less overflowing with tech and more a mix of incomes. I for one support the tax. The dichotomy of being a liberal state with a regressive tax structure needs to stop. Slippery slope argument aside this tax is a good first step. Income tax while imperfect seems to be the best system we have to tax the rich and not the poor.

phyzix5761 7mo ago
The rich don't tend to have much income to tax (proportionally). The bulk of their wealth increase per year comes from capital gains.
- thewebguyd 7mo ago
  Washington also has a capital gains tax now, 7% on long-term capital gains above $270k, and 9.9% on gains above $1 million, exempting real estate and retirement accounts.

dragonwriter 7mo ago

Raising income taxes for those making over $1 million while cutting taxes paid by people making under $1 million makes it cheaper (in employer cost for the same disposable income; looked at a different way, it provides more disposable income for the same nominal pay) to hire workers across most of the income spectrum of any industry (even in tech—most workers in the field aren’t making over $1 million/yr).

pc86 7mo ago
The only people making more than $1M in W2 income are in fields where nearly everyone is going to be making that. Highly specialized physicians come to mind pretty quickly but I'm sure there are "lots of" (relatively speaking) attorneys making that too, and probably some other fields where it's more doable than something like tech or sales. There is no way this meaningfully changes the income distribution of hires in any industry.
- dragonwriter 7mo ago
  I didn't say it changed the income distribution within thr industry, I said it made hiring for the vast majority of roles less expensive in terms of disposable income provided (or, holding nominal pay constant, provides greater disposable income at the same pay.) That is, its not a negative economic incentive except for people who have a very large amount of income taxed as regular income where that income is not dependent on the ability to have other people with more normal incomes working in close proximity.
  - pc86 7mo ago
    Sorry for misunderstanding, yeah I think we're on the same page on that point.
- lostmsu 7mo ago
  This tax will affect about 1 in 10 new Meta hires in WA: https://www.levels.fyi/companies/meta/salaries/software-engineer?dma=819 https://www.levels.fyi/companies/meta/salaries/software-engi..., probably 2 in 10 currently employed ones. More if you consider families with 2 working SDEs (not uncommon).