Tax Season: Why I loathe paying taxes since moving to CA from the UK
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Re: Tax Season: Why I loathe paying taxes since moving to CA from the UK
#2Probably the last blog I'll write end to end now that ChatGPT is out too.
Re: Tax Season: Why I loathe paying taxes since moving to CA from the UK
#3Why did you move to California if you’re working on a B2C app?
A B2B play like, say, Zendesk, I can understand, but isn’t anywhere ok for a B2C app?
Re: Tax Season: Why I loathe paying taxes since moving to CA from the UK
#4I have a bridge to sell you if you believe the wealthy pay anywhere near 43.92%
Re: Tax Season: Why I loathe paying taxes since moving to CA from the UK
#5Why did you move to California if you’re working on a B2C app? A B2B play like, say, Zendesk, I can understand, but isn’t anywhere ok for a B2C app?
I’m actually a B2B founder with 2 exits. This is a passion project I plan to open source when it’s ready
Re: Tax Season: Why I loathe paying taxes since moving to CA from the UK
#6I have a bridge to sell you if you believe the wealthy pay anywhere near 43.92%
If you read the blog I actually explain that. However for middle class tech workers in CA, I can assure you they are
Re: Tax Season: Why I loathe paying taxes since moving to CA from the UK
#7California may be high tax for high income people, but for most middle and low income folks, it is actually pretty cheap. CA's top marginal income tax rate is actually a temporary provision which may or may not be extended when it expires, depending on who the voters elect.
> driving away the 1% of households that pay 50% of the taxes in California, worsening the situation for everyone.
One big problem is that over the decades the economy has shifted more to services and less to sales of physical goods, so sales tax revenue has declined disproportionately. We should have a sales tax on services to offset reductions in income tax, which would be much better for creating steady revenue.
>this is the only place we’ve lived where it would add an additional $2,000+/month expense to keep our family’s healthcare while unemployed.
That's inaccurate. If your income is low, you can get subsidized coverage through Affordable Care Act (aka Obamacare), up to 100%.
>government retirement plans like 401(k)s
401k is not a "government plan", it is an employer-sponsored plan. There is no "retirement age" associated with a 401k or an IRA, for that matter. You are making a pretty big mistake here by not maxing out your available opportunities to defer taxes. The tax you pay when you retire on such contributions is based on where you live at the time, not where you lived when you earned the money.
>Lastly, we won’t allow ourselves to be audited without our knowledge by the IRS by using a cloud-based personal finance app that could be subpoenaed behind our backs if they continue pushing for new powers.
Paranoid maybe? Audits are a necessary component of our voluntary reporting system, and you have nothing to fear if you pay what you legitimately owe. You will absolutely be notified if you are being audited, and get a chance to provide accurate information. Far more people cheat on their taxes than are unfairly dunned by the IRS.
Re: Tax Season: Why I loathe paying taxes since moving to CA from the UK
#8California may be high tax for high income people, but for most middle and low income folks, it is actually pretty cheap. CA's top marginal income tax rate is actually a temporary provision which may or may not be extended when it expires, depending on who the voters elect. > driving away the 1% of households that pay 50% of the taxes in California, worsening the situation for everyone. One big problem is that over t…
Thanks for the comment. I wasn't aware of that point on the high top marginal tax rate, I can only comment that it's been in place for a long time (since I moved here) and I don't get any sense personally that it will be expired when California is constantly looking for ways to increase taxes.
Re. healthcare, from past people I've hired and let go and friends who've been unemployed, perhaps as they're all in tech with higher incomes, it seems pretty accurate. I remember one employee had to setup Cobra to continue keeping their healthcare plan, and it was actually more expensive than what the company was paying for some reason! Terrible system in general...
Re. 401(k), I understand these are privately managed accounts, but the rules around them are dictated by the government, and can be changed as many countries are doing in general. And there are penalties for withdrawing before 59.5years, which I would call the "retirement age" on these plans. I completely get the math of deferring taxes on your investments, and employer contributions, but I prefer to find other tax strategies that lock in tax savings today and also have more freedom around what we do with our money, these plans are pretty restrictive and I suspect will only get more restrictive in future as I mention in the blog.
With regards to my paranoia, I did link to a full blog on Privacy explaining that position, but specifically this attempt which fortunately failed: https://abcnews.go.com/Politics/biden-admin-backs-tracking-b...
I could be wrong, but this is one of many examples I've heard about since moving here, the general theme being they want more powers to get our data and audit us. Since moving here, our experience is the IRS is way more aggressive and invasive with tax filings and penalties than we ever experienced in the UK too. And don't even get me started on the exit tax, which for some reason kicks in after 8 years if you're on a green card, requires you to list every asset you have worldwide, and then pay capital gains on it, if you ever decide to leave the USA one day!
Re: Tax Season: Why I loathe paying taxes since moving to CA from the UK
#9I have a bridge to sell you if you believe the wealthy pay anywhere near 43.92%
If you read the blog I actually explain that. However for middle class tech workers in CA, I can assure you they are
Even if I take you at face value and say you paid an effective tax rate of 43.92% on an income of USD 650k+ (or USD 279.5k+ which I still contend nobody does, unless you do some kind of shady math including all your property taxes and sales taxes and all kinds of nonsense), can you really say with a straight face that people making USD 650k+ a year, year after year are part of the middle class?
Who is in the upper class? Just the thousand or so billionaires?
Re: Tax Season: Why I loathe paying taxes since moving to CA from the UK
#10The key thing here is that Americans see all the stuff in the left hand column as “socialism”.
The author sees the relationship between the government providing all those services and a healthy functioning society. Americans do not… again, they see provision of community/common good social services as socialism.
Americans don’t see a direct line relationship between “socialism” and tent cities of homeless (though it’s true there is also a drug problem there).
In short, all the stuff that many other social democracies see as core to functioning society, the Americans…. speaking generally…. don’t want.