States with highest and lowest taxes

[Chew Toy McCoy]

https://www.npr.org/2023/03/30/1166970506/tax-burden-by-state-income-property-sales

What I find interesting is a lot of people think CA has the highest and TX has the lowest and neither state made the list.

 

[mac_in_tosh]

It's not always a question of how much people are taxed but rather what they get for what they are paying. Some European countries have high taxes and high costs of living but their citizens consistently rank among the world's happiest.

 

[Cmaier]

It's not always a question of how much people are taxed but rather what they get for what they are paying. Some European countries have high taxes and high costs of living but their citizens consistently rank among the world's happiest.

The #1 and #2 happiest cities in America are both in California’s Silicon Valley - Fremont and San Jose. Weird how they can be so happy without open carry laws, with high taxes, and with all those people speaking foreign languages, am I right?

 

[Edd]

The #1 and #2 happiest cities in America are both in California’s Silicon Valley - Fremont and San Jose. Weird how they can be so happy without open carry laws, with high taxes, and with all those people speaking foreign languages, am I right?

I take your points, but having $ helps.

 

[Cmaier]

I take your points, but having $ helps.

When I moved out here, I lived in Fremont for the first several years because it was the only place I could afford. At the time it was $1300 a month rent for a 600 square foot apartment, and a long commute to San Jose for work.

Interestingly, #1 and #2 are not very wealthy enclaves of Silicon Valley; the people with money go to Palo Alto, Los Gatos, Los Altos, Menlo Park, etc.

Of course it’s all relative - ”poor” people in San Jose make more money than rich people in much of the country. But everything is so expensive that you don’t feel rich unless you are making a ton of money. $100k a year is likely going to make you feel pretty poor in most of the Bay Area.

 

[Citysnaps]

When I moved out here, I lived in Fremont for the first several years because it was the only place I could afford. At the time it was $1300 a month rent for a 600 square foot apartment, and a long commute to San Jose for work.

Interestingly, #1 and #2 are not very wealthy enclaves of Silicon Valley; the people with money go to Palo Alto, Los Gatos, Los Altos, Menlo Park, etc.

Of course it’s all relative - ”poor” people in San Jose make more money than rich people in much of the country. But everything is so expensive that you don’t feel rich unless you are making a ton of money. $100k a year is likely going to make you feel pretty poor in most of the Bay Area.

In general, and having not put a great deal of thought into it... I think people who grew up living on the San Francisco peninsula (where a large part of Silicon Valley is) and ended up working in tech, are for the most part still living here. Housing costs are higher, but tech wages are higher, so it all kind of works out.

 

[rdrr]

I would argue that NH has one of the higher tax rates, especially for those who live in the lower part of the state. NH traditionally empties out during the work day into Massachusetts. The pay is higher for almost every job you could compare it to in NH, and most people move to NH because the real estate is cheaper. However...

Due to there not being an income tax or sales in NH, the real estate tax is very high. You still pay hidden taxes like a "fee" based on your cars value per $1000 (but its not a tax like MA ). And for those who work in MA, you have to pay out of state Massachusetts income tax, where they make a nice form that shows you all the deductions you could take if you were a Massachusetts resident, but you can't. There is one loophole that MA has been threatening to close down though. As long as you work remotely in NH and never cross the state border, you can deduct that day from being taxable (minus vacation or sick days). That comes with a huge headache or proportioning your work days, having to sometimes file your taxes manually (one year turbo tax wouldn't let me file my MA state tax this way), and having evidence that you worked from home, e.g. emails stating as such, and possible corporate VPN logs. I have heard a few folks that do this actually get audited by the Massachusetts Department of Revenue, and they scrutinized every day claimed not taxable.

Also fun fact. Back in the 90s NH toyed with a small income tax (I think it was 2%), and Massachusetts threatened to sue and indicated that they wouldn't acknowledge the NH tax as a deduction. Because they would only be entitled to 3% instead of the full 5%. I think it was reported that MA was behind some campaign ads targeting NH voters to get a strong base of opposition to the proposal. I wouldn't put it pass them. They even have the luxury of double dipping. Also they tax NH residents for working in MA, and MA residence for working in NH. Finally MA has on their form both Resident and Non Resident to pay the optional state tax of 6.25 instead of the mandatory 5%.

Yeah! Sign me up for that one!

 

[Eric]

In general, and having not put a great deal of thought into it... I think people who grew up living on the San Francisco peninsula (where a large part of Silicon Valley is) and ended up working in tech, are for the most part still living here. Housing costs are higher, but tech wages are higher, so it all kind of works out.

Also, many of those same people who bought 20+ years ago paid normal prices for homes before they skyrocketed so they're essentially grandfathered in. We rented a 1000 sq ft home in Daly City for a year and it was around $50K, we had to move out to the central valley to buy. Right now the median income needed to buy out on the peninsula is $350K a year, regular people simply can't afford that.

 

[Cmaier]

Also, many of those same people who bought 20+ years ago paid normal prices for homes before they skyrocketed so they're essentially grandfathered in. We rented a 1000 sq ft home in Daly City for a year and it was around $50K, we had to move out to the central valley to buy. Right now the median income needed to buy out on the peninsula is $350K a year, regular people simply can't afford that.

I think you have to go back more than 20 years. I bought my house a little over 20 years ago, in one of the towns that was a much better value than the santa clara/sunnyvale/mountain view stretch, and it cost more than double what an equivalent house in the NY suburbs would have cost at the time. At the time, I was making around $125k, I think. Since i had no other expenses and my boss gave me a bonus i could use for the down payment, it was “affordable” at the time.

I think the issue in the valley is that salaries have not gone up nearly as fast as house prices. I don’t know what a first year CPU designer with a PhD and who is on his third employer within a year makes now, but I doubt it is more than 3x that $125k, despite house prices having tripled.

 

[dada_dave]

It’s also important to remember that not everyone who lives and works in the Bay Area is in tech and earns good money for their labor.

 

[Citysnaps]

I remember at my first real tech job in Sunnyvale (ESL Inc) where young new employees out of school would typically get together (2 or 3) and rent a small house splitting the rent. Over time each saved enough for a down payment on their own home. That worked out pretty well for some. I took a remote overseas 1 1/2 year assignment in the Middle East that gave my salary a nice boost while away (and no place to spend any money) so that I could qualify for a loan and quickly purchased a home that I had rented to others, before I left.

 

[Eric]

It’s also important to remember that not everyone who lives and works in the Bay Area is in tech and earns good money for their labor.

Exactly, there's a huge working class and in order for them to make it most are forced into shared housing. In Daly City it's not uncommon to see 9 or 10 people per household. They've been doing a better job of putting up apartments up and down the peninsula though so there's that but it's really overcrowded and overpriced.