Again, taxes are a “bid up” situation. Those willing to pay taxes for the location will. Those unwilling, move to a low(er) tax locale. The limits on the Federal state & local tax deduction caused a lot of relocation. It’s hard to just pick up and move, but over time the market sorts this out. A lot of older Pennsylvanians move to Florida to avoid our state inheritance tax.As a renter also in coastal California, I must respectfully disagree. My out-of-pocket cost for California state income tax is higher than my rent... but then again, I rent a small studio apartment in a dodgy part of town. That's because rental costs can be controlled to large extent, via lifestyle choices. Taxes can not. And perversely, even though one's running-expenses are higher because one has a family, the taxes will be lower, than if one were (on the same income) single and without children.I want to underscore this very succinct and on-target comment.Cost of living is almost entirely dependent on house costs which you can estimate via similar rents - and California near the coast is $50-75k as table stakes.
You can get in lower if you’re 30 years in a house and have prop 13 lot taxes.
As a renter who has moved between a number of low-cost and high-cost areas of the country, currently in coastal California, I see this clearly. The sum of our rent and utilities, for roughly equivalent 3BR houses in neighborhoods of equivalent quality, adjusted for inflation, has varied between $1,200/month and $4,500/month. Our total spending outside of rent and utilities, adjusted for inflation and family size, has varied very little.
The debate around how to define "frugal" is interesting, but the fact is that it's hard for a family to spend much less than $100k/year when they start with rent at $55k/year.
The point here is less to complain about California taxes (though I admit such frustration), than to note, that as our investments and associated income increase, so do our expenses - not [just] "lifestyle creep", but the associated tax burden. It becomes increasingly hard to stay frugal. I am reminded of a scene in the film "Margin Call", where a neophyte asks the high-roller financier how the latter manages to burn through a $2.5M/year income. The answer was, that 50% disappears down the tax-drain, before our hero even sees his paycheck. That was... sobering! Compared to such expense, one might dine-out at fancy restaurants every night, or instead microwave ramen noodles at home... won't make much difference, would it? Neither would it much matter, if this character becomes my roommate in the rat-hole on the wrong side of the tracks, or buys a tony condo downtown.
Statistics: Posted by Leesbro63 — Fri Mar 15, 2024 11:28 am — Replies 140 — Views 10408