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High taxes be damned, the rich keep moving to California

latimes.com

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Re: High taxes be damned, the rich keep moving to California

#61

Post by m0zg »

lsc wrote: post #42
m0zg wrote: post #35

Earlier quoted context omitted.

With a 2hr commute.

meh, if you don't have kids, $125K is plenty to live in a so so part of sunnyvale or mountain view (which is totally safe, just your apartment will be built in the '60s to working class standards, which isn't as bad as it sounds; the weather here means that having flimsy and poorly-insulated housing isn't as big of a deal as it would be otherwise.) I mean, you won't be buying right now, but you will be able to save m…

>> if you don't have kids

Most adults do have kids, though. It's unreasonable to expect that one will not have kids, seeing how we're all here because our parents were in a position to have kids. So I chose to live elsewhere instead.

Re: High taxes be damned, the rich keep moving to California

#62

Post by mav3rick »

diN0bot wrote: post #26
shard972 wrote: post #21

Earlier quoted context omitted.

Yea i don't get it either, I have heard broseph used in a friendly way between mostly lower-middle class people in Australia.

who are white men? it's weird to be called a white male name if you're not. not upsetting just presumptuous. what if people started calling you rachel in a friendly way? sure it's friend... still feels weird and out of place... and ultimately unnecessary if you're actually trying to be friendly.

These are people posting here not robots.

Re: High taxes be damned, the rich keep moving to California

#63

Post by muzz »

fromthestart wrote: post #6
mario0b1 wrote: post #4

>highest-in-the-nation 13.3% income tax rate That sounds very comfortable and affordable

That's state tax, which is paid in addition to federal (nationwide) tax. Some states, like Texas, have no state income tax.

That's state income tax on your second million and above in a given year. The rate on your first million every year is less. Like first-world problems, I guess the tax rate on income over $1MM/yr can be called a California problem.

Re: High taxes be damned, the rich keep moving to California

#64

Post by leereeves »

muzz wrote: post #63
fromthestart wrote: post #6

Earlier quoted context omitted.

That's state tax, which is paid in addition to federal (nationwide) tax. Some states, like Texas, have no state income tax.

That's state income tax on your second million and above in a given year. The rate on your first million every year is less. Like first-world problems, I guess the tax rate on income over $1MM/yr can be called a California problem.

> The rate on your first million every year is less.

Not much less. It works out to 10.8%, according to CA's tax calculator.

https://webapp.ftb.ca.gov/taxcalc/calculator.aspx?Submit=201...

Re: High taxes be damned, the rich keep moving to California

#65

Post by voidmain »

nostrademons wrote: post #43
lsc wrote: post #37

Earlier quoted context omitted.

Right, but the previous comment suggests that you can reduce your personal tax liability to zero while still having some personal money paid to you: "pulls out only enough in salary to meet their expenses, makes an equivalent donation to charity to offset all their "income", and then pays zero in taxes." and that's confusing, 'cause say I can live off $100K/yr. So I pay myself $140K (or whatever) and pay the taxes on…

No, I mean that you pay yourself $100K and then you make a donation of $100K of securities, real estate, etc. to a charity out of assets that you control. You can deduct the full amount of "in kind" transfers to charity, and you don't need to pay the capital gains tax on them. The value of your charitable donation gets subtracted from your AGI, so you really can get to zero task liability this way. Meanwhile, you rei…

Gifts to charity can only be deducted up to 50% of AGI. Gifts of appreciated assets only up to 30%. If you are giving to private foundations, the limits are even lower. It is possible to carry forward excess deductions for a limited time, but that doesn't really help in the long run. If you are trying to consistently reduce your AGI to zero this approach does not work.

Re: High taxes be damned, the rich keep moving to California

#66

Post by scarejunba »

jlrubin wrote: post #8
scarejunba wrote: post #5

Earlier quoted context omitted.

Broseph, they're paying 28% via federal as well, and social security and Medicare. If it were only 13% marginal that would be whoop-for-joy low.

(In case you're wondering -- you're likely being downvoted for calling the parent 'Broseph' -- it's a bit of a pejorative, which is uncalled for in HN's mostly civil discourse)

Huh, I’ve only ever used it as a friendly “dude...” equivalent. Well, TIL. Thanks for the info.

Re: High taxes be damned, the rich keep moving to California

#69

Post by hellisothers »

m0zg wrote: post #61
lsc wrote: post #42

Earlier quoted context omitted.

meh, if you don't have kids, $125K is plenty to live in a so so part of sunnyvale or mountain view (which is totally safe, just your apartment will be built in the '60s to working class standards, which isn't as bad as it sounds; the weather here means that having flimsy and poorly-insulated housing isn't as big of a deal as it would be otherwise.) I mean, you won't be buying right now, but you will be able to save m…

>> if you don't have kids Most adults do have kids, though. It's unreasonable to expect that one will not have kids, seeing how we're all here because our parents were in a position to have kids. So I chose to live elsewhere instead.

I support your ability to choose but so much of the commentary here is to the effect of “nobody should live in CA, living in CA is impossible, nobody wants to live in CA in fact everybody is leaving!” I’ve even seen a post say it’s negligent to consider raising kids in CA or the Bay Area. We’ve lived in the Bay Area 18 years, we have a kid and a house and save money, it took us 15 years to get to this point, if you want to just show up and have it all then maybe choose slewhere but crapping in living in CA or the Bay Area is getting tired

Re: High taxes be damned, the rich keep moving to California

#70

Post by esf »

gnicholas wrote: post #41
esf wrote: post #10

Earlier quoted context omitted.

Am half of a high earning couple in a bit above this range in California. Surprisingly, my taxes changed very little this year. In years prior, I always had to pay AMT, in which SALT deductions were already disallowed. The new tax law is basically a wash. I don't pay AMT, just pay higher regular. I didn't check exactly but my effective rate this year may even have gone down a little. Many people in this income range…

Interesting to hear this. I used to be a high-earner (was a tax lawyer before a startup founder) in CA and never ran into the AMT. I see several folks mention the AMT below, but if no one was getting a SALT benefit before, how could the cap have been a revenue-raiser (which it was scored as) in the tax bill? I realize that the lower rates help out high earners and can mitigate the effect of the SALT cap. But all high…

It's a revenue raiser because it does raise the taxes of people outside this range. Primarily people in 500k - 1m range were hitting AMT before, especially if married or with children.

Don't misunderstand me: I am responding only to the parent comment that the new tax law will massively change things for a 500k couple due to deductions. For that specific range for a married couple it won't (because they likely already were paying higher taxes due to AMT).

To your second point, that's also highly individual. My household income is ~800k. That makes my California effective tax rate 8.9%. I personally would have a hard time finding jobs for both my husband and myself in a new state taking only an 8.9% pay cut.

The phenomenon discussed in the article of continuing net inflow of high earners to California and out flow of middle and lower earners is not new: https://www.sacbee.com/news/state/california/article13647809...

I am not saying this is good! But the simplistic "everyone is fleeing high CA taxes" narrative is not supported by the data. What is happening is not good for California but also more complicated than that.

I would say the burden of high housing costs absolutely dwarfs the effect of taxes for most people.

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