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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

#31

Post by Retric »

patio11 wrote: post #26

The total costs here... are $790,750, which would require about a $1.6-million salary to compensate for taxes. Wait a second, 50% taxes? Not the marginal rate, the effective total rate? That is truly gobsmacking if it is accurate. I did a little math, too, and it doesn't seem impossible, particularly if you're actually spending most of that money (and thus hitting the 8%+ NYC consumption tax). 35% federal bracket, 7%…

Only stupid people making that much money pay anywhere near that much in taxes. Get an interest only mortgage and suddenly your rent is "tax free". Also options can be counted as capital gains which is 15% etc. There are a lot of tricks you can play with that level of income. Consumption taxes only apply to a smaller subset of spending because so much of your money is spent on services and out of state.

PS: The worst income bracket is single and making ~100k because they are in a high tax bracket and need to pay 15% in SS taxes on all of it.

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

#32

Post by tptacek »

micks56 wrote: post #29
byrneseyeview wrote: post #20

Earlier quoted context omitted.

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 t…

I guess it depends on the final drafting. Drafting the cap as "top 5 highest paid people can't make more than $500k" should solve the loophole you just wrote about.

Drafting the cap as "the top 5 highest paid people can't make more than $500k" isn't the same as a $500k cap on the top 100,000 employees?

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

#33

Post by nazgulnarsil »

and the costs being prohibitively high have nothing to do with the fact that there are so many people receiving these ridiculous salaries and driving up the costs of services? give me a fucking break. hello supply, meet demand. when salaries go down these ridiculously inflated prices will come down or these houses will be empty and these services going bankrupt.

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

#34

Post by fortes »

ryanwaggoner wrote: post #14

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 de…

I assume they're counting New York city and State taxes, which add up to a little over 10%, iirc. However, you're right that, with the help of a decent accountant, they can get out of paying the full tax rate normal people pay.

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

#35

Post by ryanwaggoner »

mattmaroon wrote: post #22
ryanwaggoner wrote: post #14

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 de…

And you're not even factoring in that most of their income comes in the form of grants or options that pay the capital gains tax rate.

Agreed, though the article specifically said "salary", so I gave them the benefit of the doubt there ;)

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

#37

Post by angstrom »

tptacek wrote: post #8
froo wrote: post #4

As I was going through the list I still don't feel any sympathy for these bankers. The whole idea of budgeting for the majority of people is to make do with seemingly limited resources. It's what everyone does to manage their own money. Why can't someone who is supposed to manage everyones money practice a little self restraint?

I don't think the article was trying to make you feel sympathy; I think it was playing with subtext.

Either way, are we really supposed to believe these bankers don't know their way around taxes? It's not like they're squeezing paycheck to paycheck.

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

#38

Post by wallflower »

I feel silly reposting a very recent comment but it's relevant:

Tom Wolfe's "Bonfire of the Vanities" (Going broke on a million a year), p.137

"One breath of scandal, and not only would the Giscard scheme collapse but his very career would be finished! And what would he do then? I’m already going broke on a million a year!

The appalling figures came popping up into his brain. Last year his income had been $980,000. But he had to pay out $21,000 a month for the $1.8 million loan he had to take out to buy the apartment…

Of the $560,000 remaining of his income last year, $44,400 was required for the apartment’s monthly maintenance fee… $18,000 for heat, utilities, insurance and repairs, $6,000 for lawn and hedge cutting, $8,000 for taxes. Entertaining at home and in restaurants had come to $37,000. This was a modest sum compared to what other people spent."

Also UrbanBaby: UrbanBaby is an anonymous message board frequented by some typical New York UES/UWS mothers. Here they talk about not being afford private school on $400k/yr (DC = dear child, DH = dear husband) http://www.urbanbaby.com/talk/posts/50368448

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

#39

Post by micks56 »

tptacek wrote: post #32
micks56 wrote: post #29

Earlier quoted context omitted.

I guess it depends on the final drafting. Drafting the cap as "top 5 highest paid people can't make more than $500k" should solve the loophole you just wrote about.

Drafting the cap as "the top 5 highest paid people can't make more than $500k" isn't the same as a $500k cap on the top 100,000 employees?

If you sort employees by pay it is the same. But if you sort employees by power it might not be.

For example, some sales people at tech companies make much more money than mid-level managers taking home a couple hundred thousand dollars per year. Some of those sales people will make more than the senior level executives. Which one is more important and is higher rank is up for debate.

In my comment above I tried to explain a way to fix the loophole that byrneseyeview listed. Saying nobody makes more than $500k is a way to fix that.

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

#40

Post by mattmaroon »

ryanwaggoner wrote: post #35
mattmaroon wrote: post #22

Earlier quoted context omitted.

And you're not even factoring in that most of their income comes in the form of grants or options that pay the capital gains tax rate.

Agreed, though the article specifically said "salary", so I gave them the benefit of the doubt there ;)

It did, I'm just assuming Obama was including incentive based compensation or otherwise it's just too trivial to game.
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