Why higher-income workers in California may get surprised by tax hike in 2024
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Re: Why higher-income workers in California may get surprised by tax hike in 2024
#2From Bogleheads...
>This also effectively increases the maximum marginal tax rate for CA high earners. The maximum marginal rate is now:
37% Federal + 2.35% Medicare + 13.3% CA Income + 1.1% CA SDI = 53.75%
Re: Why higher-income workers in California may get surprised by tax hike in 2024
#3From Bogleheads... >This also effectively increases the maximum marginal tax rate for CA high earners. The maximum marginal rate is now: 37% Federal + 2.35% Medicare + 13.3% CA Income + 1.1% CA SDI = 53.75%
That makes California the state with the highest marginal tax rate. It also puts California very close to the European countries with the highest margin tax rates (for instance, Spain and France have similar rates).
My opinion: High tax rates in Europe are the "price" of free (or very cheap) healthcare, cheap university education, and a strong social welfare net. But Californians at the high end are paying almost the same price, and missing out on most of the benefits. I don't think this is a good situation, and I don't think it's sustainable.
Taxes in the USA have a lot of loopholes for the ultra-wealthy and for large corporations. However, there's not much that "normal" salary earning employees can do to escape these high rates. This ends up putting a lot more pressure on workers to contribute economically, which seems misguided since the corporations could haul their weight more here.
Re: Why higher-income workers in California may get surprised by tax hike in 2024
#4From Bogleheads... >This also effectively increases the maximum marginal tax rate for CA high earners. The maximum marginal rate is now: 37% Federal + 2.35% Medicare + 13.3% CA Income + 1.1% CA SDI = 53.75%
That makes California the state with the highest marginal tax rate. It also puts California very close to the European countries with the highest margin tax rates (for instance, Spain and France have similar rates). My opinion: High tax rates in Europe are the "price" of free (or very cheap) healthcare, cheap university education, and a strong social welfare net. But Californians at the high end are paying almost the…
A decade or so ago I read an article titled something like "If Americans knew what Europeans get for their tax dollars, they (Americans) would riot in the streets".
My tin foil hat theory as to why I can't find it is because it was removed in hopes of preventing those riots.
It's really insane to see Americans pay the same tax as Europeans (and Canadians, and Australians) but get so, so much less for that money.
Re: Why higher-income workers in California may get surprised by tax hike in 2024
#5Earlier quoted context omitted.
That makes California the state with the highest marginal tax rate. It also puts California very close to the European countries with the highest margin tax rates (for instance, Spain and France have similar rates). My opinion: High tax rates in Europe are the "price" of free (or very cheap) healthcare, cheap university education, and a strong social welfare net. But Californians at the high end are paying almost the…
A decade or so ago I read an article titled something like "If Americans knew what Europeans get for their tax dollars, they (Americans) would riot in the streets". My tin foil hat theory as to why I can't find it is because it was removed in hopes of preventing those riots. It's really insane to see Americans pay the same tax as Europeans (and Canadians, and Australians) but get so, so much less for that money.
relatively few Californians pay rates that high, one has to be at >$1m/yr to max out the CA marginal rates.
Re: Why higher-income workers in California may get surprised by tax hike in 2024
#6From Bogleheads... >This also effectively increases the maximum marginal tax rate for CA high earners. The maximum marginal rate is now: 37% Federal + 2.35% Medicare + 13.3% CA Income + 1.1% CA SDI = 53.75%
That makes California the state with the highest marginal tax rate. It also puts California very close to the European countries with the highest margin tax rates (for instance, Spain and France have similar rates). My opinion: High tax rates in Europe are the "price" of free (or very cheap) healthcare, cheap university education, and a strong social welfare net. But Californians at the high end are paying almost the…
It also puts California very close to the European countries with the highest margin tax rates (for instance, Spain and France have similar rates).
This isn't even remotely true. In France, the highest marginal rate kicks in at EUR 160k (approximately $170k). To get the same marginal tax rate in California, you would need to be making approximately $350k (approximately EUR 330k), or more than twice as much. (Note that in all cases, I am excluding payroll taxes like US SSI or French CSG).
(or very cheap) healthcare, cheap university education, and a strong social welfare net
The Europeans paying the same marginal rates as their extremely wealthy Californian counterparts generally do not qualify for most of this benefits of the strong social welfare net, and for the most part have chosen to have the bulk of their medical treatment in the U.S., paying out-of-pocket even though they could get the same treatment locally for free or very cheaply.
Re: Why higher-income workers in California may get surprised by tax hike in 2024
#7[deleted]
Re: Why higher-income workers in California may get surprised by tax hike in 2024
#8Earlier quoted context omitted.
That makes California the state with the highest marginal tax rate. It also puts California very close to the European countries with the highest margin tax rates (for instance, Spain and France have similar rates). My opinion: High tax rates in Europe are the "price" of free (or very cheap) healthcare, cheap university education, and a strong social welfare net. But Californians at the high end are paying almost the…
It also puts California very close to the European countries with the highest margin tax rates (for instance, Spain and France have similar rates). This isn't even remotely true. In France, the highest marginal rate kicks in at EUR 160k (approximately $170k). To get the same marginal tax rate in California, you would need to be making approximately $350k (approximately EUR 330k), or more than twice as much. (Note tha…
They do qualify if they suddenly become poor, which is the point of the safety net.
> $350k… extremely wealthy
In many parts of California this is someone who can buy a just okay house with a long mortgage. Have we redefined the word wealthy?
Re: Why higher-income workers in California may get surprised by tax hike in 2024
#9Earlier quoted context omitted.
That makes California the state with the highest marginal tax rate. It also puts California very close to the European countries with the highest margin tax rates (for instance, Spain and France have similar rates). My opinion: High tax rates in Europe are the "price" of free (or very cheap) healthcare, cheap university education, and a strong social welfare net. But Californians at the high end are paying almost the…
A decade or so ago I read an article titled something like "If Americans knew what Europeans get for their tax dollars, they (Americans) would riot in the streets". My tin foil hat theory as to why I can't find it is because it was removed in hopes of preventing those riots. It's really insane to see Americans pay the same tax as Europeans (and Canadians, and Australians) but get so, so much less for that money.
Taxes are far higher in Europe than in America. The additional "Social" benefits in my opinion are trivial in comparison with the differences in taxes.
Progressive income taxes increase at a far higher rate in Europe. Plus Europe has other forms of taxes: far higher sales taxes (VAT), corporate taxes, and other forms of taxes like buying-property tax (Grunderwerbsteuer).
Re: Why higher-income workers in California may get surprised by tax hike in 2024
#10Earlier quoted context omitted.
That makes California the state with the highest marginal tax rate. It also puts California very close to the European countries with the highest margin tax rates (for instance, Spain and France have similar rates). My opinion: High tax rates in Europe are the "price" of free (or very cheap) healthcare, cheap university education, and a strong social welfare net. But Californians at the high end are paying almost the…
It also puts California very close to the European countries with the highest margin tax rates (for instance, Spain and France have similar rates). This isn't even remotely true. In France, the highest marginal rate kicks in at EUR 160k (approximately $170k). To get the same marginal tax rate in California, you would need to be making approximately $350k (approximately EUR 330k), or more than twice as much. (Note tha…
Do you have a citation for the idea that wealthy Europeans are getting the bulk of their treatment in the US? I can't say I've ever come across that idea at all.
I've heard of people paying for private medical care, to supplement their free healthcare, but not traveling to the US for it.