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Trying to Live on 500K in New York City

nytimes.com

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Re: Trying to Live on 500K in New York City

#11

Post by natrius »

captainobvious wrote: post #6
gaius wrote: post #2

Looking at those numbers, Obama has done NYC out of an awful lot of taxes. I wonder how much schadenfreude will be left once that trickles down to services that ordinary people take for granted - or who will make up the shortfall.

The 500k limit is only on executives of banks that receive future extraordinary assistance from the government--the execs are free to find jobs elsewhere if they don't want the restrictions. The banks are free to not take the assistance if they can maintain a healthy capital level without it. With fractional-reserve banking that is the condition they implicitly agreed to in exchange for the ability to conjure money f…

You say that as if the right to operate a fractional reserve bank is granted by the government. Without a government, fractional reserve banking would still happen, and people would put their money in banks that had good reputations.

I find the aversion to fractional reserve banking that is frequently displayed on the internet quite odd.

Re: Trying to Live on 500K in New York City

#13

Post by sounddust »

gaius wrote: post #2

Looking at those numbers, Obama has done NYC out of an awful lot of taxes. I wonder how much schadenfreude will be left once that trickles down to services that ordinary people take for granted - or who will make up the shortfall.

None of these people are leaving NYC. Of course they're going to complain because they want people to think that it's inhumane to limit their salary. But if things get tough, they have millions of dollars in savings accounts, assets, vacation homes that they can sell off to keep up their lavish lifestyle long enough for the economy to recover.

Besides, considering that most of these people should have been going to jail, I don't mind if we end up making them to move to New Jersey :)

Re: Trying to Live on 500K in New York City

#14

Post by ryanwaggoner »

If a person is married with two children, the weekly deductions on a $500,000 salary are: federal taxes, $2,645; Social Security, $596; Medicare, $139; state taxes, $682; and city, $372, bringing the weekly take-home to $5,180, or about $269,000 a year, said Martin Cohen, a Manhattan accountant.

Martin needs to check his figures. Social security, for example, is 6.2% for the first 106k of income, which is a weekly deduction of about $127, not $596. This is a difference of almost $25k / year.

It's also highly unlikely that a person in this scenario wouldn't have a range of tax mitigation strategies, from retirement investments to real estate.

EDIT: Here's another one:

The total costs here...are $790,750, which would require about a $1.6-million salary to compensate for taxes.

By and large, people making millions of dollars per year in income do not end up paying effective tax rates of greater than 50%. The highest marginal tax rate is currently 35%, so even once you account for SS/Medicare, city, and state taxes, you're still not above 50%, especially once all deductions are taken into account. Additionally, many of these folks are probably subject to AMT, which is a flat rate of 26-28%.

Re: Trying to Live on 500K in New York City

#15

Post by jacobolus »

kingkongrevenge wrote: post #12

How about a $500K salary cap for presidents of universities that accept federal grants and loan subsidies? Heh heh.

Very few make much more than that. Here's an article about university president pay from 2006: http://www.thecrimson.com/article.aspx?ref=515933

Apparently the Harvard president has made ~$500-600k for the last many years.

Re: Trying to Live on 500K in New York City

#16

Post by LogicHoleFlaw »

sounddust wrote: post #13
gaius wrote: post #2

Looking at those numbers, Obama has done NYC out of an awful lot of taxes. I wonder how much schadenfreude will be left once that trickles down to services that ordinary people take for granted - or who will make up the shortfall.

None of these people are leaving NYC. Of course they're going to complain because they want people to think that it's inhumane to limit their salary. But if things get tough, they have millions of dollars in savings accounts, assets, vacation homes that they can sell off to keep up their lavish lifestyle long enough for the economy to recover. Besides, considering that most of these people should have been going to j…

New Jersey?

I mean, we do have laws against cruel and unusual punishment...

Re: Trying to Live on 500K in New York City

#17

Post by homme »

jacobolus wrote: post #15
kingkongrevenge wrote: post #12

How about a $500K salary cap for presidents of universities that accept federal grants and loan subsidies? Heh heh.

Very few make much more than that. Here's an article about university president pay from 2006: http://www.thecrimson.com/article.aspx?ref=515933 Apparently the Harvard president has made ~$500-600k for the last many years.

Cripe, more than the US president less all the attendant duties. A functionary making that much...obligatory greenspun (nsfw) http://philip.greenspun.com/school/tuition-free-mit.html

Re: Trying to Live on 500K in New York City

#18

Post by maximilian »

kingkongrevenge wrote: post #12

How about a $500K salary cap for presidents of universities that accept federal grants and loan subsidies? Heh heh.

Its actually football coaches at big universities that make all the money. Median salary is over a million dollars last I saw. The academic salaries are much more reasonable. Mostly in the 100-200K range for upper level profs and administrators.

Re: Trying to Live on 500K in New York City

#19

Post by byrneseyeview »

homme wrote: post #17
jacobolus wrote: post #15

Earlier quoted context omitted.

Very few make much more than that. Here's an article about university president pay from 2006: http://www.thecrimson.com/article.aspx?ref=515933 Apparently the Harvard president has made ~$500-600k for the last many years.

Cripe, more than the US president less all the attendant duties. A functionary making that much...obligatory greenspun (nsfw) http://philip.greenspun.com/school/tuition-free-mit.html

If you factor in the cost of transportation and protection (not to mention the rent on a swanky, DC-area mansion), the President is pretty high:

http://dealbreaker.com/2009/01/no-more-than-the-president-of...

Re: Trying to Live on 500K in New York City

#20

Post by byrneseyeview »

tptacek wrote: post #7
captainobvious wrote: post #6

Earlier quoted context omitted.

The 500k limit is only on executives of banks that receive future extraordinary assistance from the government--the execs are free to find jobs elsewhere if they don't want the restrictions. The banks are free to not take the assistance if they can maintain a healthy capital level without it. With fractional-reserve banking that is the condition they implicitly agreed to in exchange for the ability to conjure money f…

It also only applies to the top N executives at those firms, where last I checked N was 5.

Seems like there's a glaring loophole there. Let's say they want to pay their top five people ten million dollars each. And let's say they can think of five VP-level people who should be earning around $500K each. Why not say "Oh, these VPs are crucial to our survival. They're worth $20 million a year. Sadly, we can only pay them $500K of that." At that point, the VPs get about what they would normally get, and the traders can safely be paid $10 million a year.

Or am I misunderstanding the cap?

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