Seattle City Council Unanimously Approves Income Tax For the Rich (geekwire.com) 486
reifman writes: Amazon, tech employees and those making $250,000 or more annually in Seattle will now pay a 2.25 percent income tax. "The Seattle City Council estimates that the tax would bring in an additional $140 million each year," reports GeekWire. "The revenue would go toward the city's housing affordability agenda and carbon reduction goals and supplant federal funds if they are cut. The revenue is also intended to alleviate the burden of Washington's property and sales taxes, which are often called the most regressive in the country." Anyone who's seen Amazon's impacts on Seattle and its low and middle income residents will appreciate how this tax will help the homeless, lower income and improve the environment. Not everyone is thrilled with the recently approved legislation. Jason Mercier, who directs the center for government reform with the Washington Police Center, said: "[The council is] going to unanimously adopt an illegal income tax that has no hope of taking effect and will waste taxpayer resources on litigation the city is sure to lose." The measure is expected to be challenged in court, as Washington's constitution states "a county, city, or city-county shall not levy a tax on net income." According to The Washington Post, Mercier said there is decade of case law saying that a graduated income tax is unconstitutional because income is property and under the constitution, property tax has to be taxed uniformly and no more than 1 percent.
Future proof (Score:5, Insightful)
In 10 years, the Seattle City council will complain about the impact of commuters on its road infrastructure, with larger and larger numbers of tech workers living outside the city where they are not subjects to Seattle taxes
Re:Future proof (Score:4, Insightful)
Re:Future proof (Score:5, Informative)
MOST large cities have an income tax.
I don't see rich people fleeing Chicago or NYC.
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MOST large cities have an income tax.
I don't see rich people fleeing Chicago or NYC.
What? Can you post a link to support that? Income tax is usually state, not municipal.
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I won't bother to look for NYC or Chicago, but Detroit has an income tax: http://www.michigan.gov/taxes/... [michigan.gov]
I think some of our great state's other shitty cities have them, too.
Re:Future proof (Score:5, Insightful)
Re:Future proof (Score:5, Informative)
I can verify that Chicago does not have one. We would string them up...
Re:Future proof (Score:5, Informative)
It's been years, but I believe NYC has an income tax.
Ages ago, I worked on payroll software in NYC. Of course, to test that I was doing things correctly, I used my own paycheck. I couldn't get it to balance out. Turned out my boss was taking NYC taxes out, even though I didn't actually live in NYC (I lived out on Long Island and took the train in). She calculated everything out for my co-worker, who lived in the city, and then just used the same numbers for me (since we were paid the same).
He was a little annoyed when I got a "raise" and he didn't...
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https://www.priortax.com/filin... [priortax.com] A list of cities to avoid.
Circle of life (Score:4, Interesting)
Thanks for the link.
District of Columbia – 4% on the first $10,000, 6% between $10,000 and $40,000, and 8.5% over $40,000
I guess in that instance it's poetic justice, since so many people in DC feed at the public trough. They're basically just a digestive system transforming federal taxpayer money into municipal taxpayer money, removing 91.5% of the value in the process.
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Those are just the cities that do it themselves and the advice to move to a state that prohibits city income taxes is unhelpful unless the state also prohibits county income taxes. Cities do draw income from county taxes. Since cities tend to have a majority of the population in a county they frequently have control of the county board that deals with taxes. I'm aware of one city income tax that is being proposed right now that is being levied as a county income tax. My guess is that the encouragement for a
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NYC absolutely has an income tax [nyc.gov]. To partially avoid the whole "people will leave the city!" adjacent Yonkers also has a city income tax.
That said, Nassau and the non-Yonkers parts of Westchester county are great for commuters. In addition to avoiding the city tax, the same unlimited Metrocard that works for the subways also works out there, so bus-commuter rail-subway trips are significantly cheaper than they would be anywhere else outside the city.
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I don't see rich people fleeing Chicago or NYC.
You must be joking. Why do you think drove the real estate boom in NJ? Companies leaving NY. NY has failing schools and hasn't been able to afford a new subway line in many, many years. Oh, and you should take a drive through Chicago if you ever look to get depressed. It's certainly the nastiest place in the country that I have ever been to. And I have been to many.
You also missed the whole point about company town. This is specifically a tax on Amazon developers. They the main block of new reside
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The NYC private schools aren't that expensive, though. Many are subsidized by the Catholic church and offer scholarships. The best motivation I got to study hard was when my mom warned me "We have no money. If you don't get a scholarship into a private school, you're going to have to go to {local public school} where the crack dealers recruit from". Studied my ass off and got 2 out of 3 scholarships. Our three person household lived in NYC on 15k/yr in the late 90's, failure was literally not an option
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They don't, and for one simple reason. To avoid the tax all you have to do is move outside the city. Which is of course what happens. Only an idiot would allow themselves to be extorted if they could avoid it. I knew a lot of senior NCOs when I was in the Air Force that retired to states with no state income tax for that very reason.
Re:Future proof (Score:5, Informative)
I don't see rich people fleeing Chicago
The average annual income of taxpayers leaving Illinois was $77,000 while the average income of people entering Illinois was $57,000 in 2014 [irs.gov]; the vast majority of the outflow hailing from the Chicagoland area. So yeah, it's pretty much exactly "rich" people fleeing Chicago.
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No, in ten years there won't be an income tax, because the courts will have struck it down. The Washington state constitution seems to be pretty clear on the matter. The city government will be noticeably poorer, however, what with not having the tax and being stuck with a bunch of legal fees.
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It will be worse. They will have been collecting the income tax for 10 years and will need to pay it back. The administrative overhead of tracking down everyone they collected it from and cutting them checks will be more than they ever got in the first place.
Re:Future proof (Score:4, Informative)
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I've been to Seattle several times -- in the past couple years -- and my experience is far more in line with the GP's than yours. I've never seen it anywhere close to empty and, while I've seen worse traffic congestion, to imply that there's little traffic (both auto and foot) is a flat-out lie.
When's the last time you were actually there? Or were you perhaps comparing it unreasonably against ultra-crowded cities?
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In 10 years, all those 'homeless people' will have been replaced by gang members and Seattle will turn out like Chicago. We call what Seattle's calls homeless "hipsters".
Re:Future proof (Score:5, Insightful)
In 10 years, the Seattle City council will complain about the impact of commuters on its road infrastructure
More likely they will be complaining about why there isn't enough usage of the mandatory tandem bicycle ride-sharing service that they instituted when they turned all the city's North-South streets into seven-abroad bicycle lanes.
I proudly call Seattle my home. And its mayors and city councils really do believe they're doing the right thing, bless their hearts. But they are pretty much all blithering idiots. Because Seattle is a tech boom town filled with generally liberal people, they have the money and political backing to do well-meaning but impractical things.
You know, things like spending hundreds of thousands of dollars on a bike share program [citylab.com] in a city that is full of huge f***ing hills and where it rains half the year. Or mandating a $15 minimum wage without studying it first [nytimes.com] and then seeing it decrease earnings of those it was designed to help, at least according to one recent study (more research over time is still needed to say for sure). There's a much longer list for someone crankier than me to make.
It's well meaning but it's almost universally poorly thought out in terms of unintended consequences. Like this income tax idea, which will perversely drive out the people who pay the most in property taxes and push them into driving into work from the suburbs. And Seattle already has miserable traffic. But, again, while the economic sun is shining the city has the leeway to try these grand but foolish experiments. Unfortunately, at some point the tech boom here will end and there will be a nasty bill to pay for it.
Re:Future proof (Score:5, Insightful)
Or mandating a $15 minimum wage without studying it first [nytimes.com] and then seeing it decrease earnings of those it was designed to help, at least according to one recent study (more research over time is still needed to say for sure). There's a much longer list for someone crankier than me to make.
It's well meaning but it's almost universally poorly thought out in terms of unintended consequences.
Bullshit. I was part of the effort to raise the minimum wage in Seattle to $15. The effort was studied and argued ad nauseam. We looked at all the data. Study after study shows that paying people a living wage is not only feasible, but improves the economy. It may be shocking to learn, but putting money into the hands of people who'll actually spend it in the community boosts the economy. Your spending is my income, my spending is your income. You get paid more, then you spend more. Then I make more and pay you back. That's how economies work.
(What hurts an economy? A few rich assholes sucking up all the money for themselves and then sending that money out of the economy to their Swiss bank accounts.)
This recent study came out contradicting previous results. It stated that increasing the minimum wage hurts workers. Turns out the new study wasn't peer reviewed. Another shocker. One problem of many is that the new study excluded minimum wage employers with multiple locations. Why? No good reason. If a restaurant was successful and opened a second location, it wasn't included in the study. No surprise that increasing the minimum wage looks bad if you methodically cut out the successful businesses.
http://www.epi.org/publication... [epi.org]
Like this income tax idea, which will perversely drive out the people who pay the most in property taxes and push them into driving into work from the suburbs. And Seattle already has miserable traffic.
Everyone wants to live close to downtown. Part of that is precisely because of the miserable traffic. We've got the hottest housing market in the nation. If a few people leave over the income tax, there's 10 times the number of people who'd love to buy their homes, move in, and pay that income tax. Our housing market will be completely fine with this tax change.
But, again, while the economic sun is shining the city has the leeway to try these grand but foolish experiments. Unfortunately, at some point the tech boom here will end and there will be a nasty bill to pay for it.
Yeah, sure. The internet is just a fad. It'll end soon. Keep telling yourself that.
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It may be shocking to learn, but putting money into the hands of people who'll actually spend it in the community boosts the economy. Your spending is my income, my spending is your income. You get paid more, then you spend more.
Wages come from consumers. You're pulling largely from the middle-class consumer base, and preventing them from spending elsewhere; effectively, you're taking money out of middle-income-earner hands and moving it into low-income-earner hands.
This is only a net-gain if you have a lot more spending on those goods from tourism than from local consumers.
(What hurts an economy? A few rich assholes sucking up all the money for themselves and then sending that money out of the economy to their Swiss bank accounts.)
What percentage of McDonalds food purchases are made by top 10% income earners?
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I like what Mr. Rogers had to say about it:
"The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover didn’t know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night, anyhow. But it will at least have passed through the poor fellow’s hands.”
-Will Rogers in the St. Petersburg Times - Nov 26, 1932
Fight back (Score:2, Interesting)
At any rate, those rich aren't really paying much in the way of taxes even if this particular tax is allowed to take effect.
For someone making $250k, that's a $6k tax. It's not bankruptcy but it's like buying the city two venti mochas at Starbucks every day. Just so they can play Social Justice and throw money out the window on misguided programs. Fuck that.
Re:Fight back (Score:5, Informative)
At any rate, those rich aren't really paying much in the way of taxes even if this particular tax is allowed to take effect.
For someone making $250k, that's a $6k tax. It's not bankruptcy but it's like buying the city two venti mochas at Starbucks every day. Just so they can play Social Justice and throw money out the window on misguided programs. Fuck that.
No, it's not. For someone making $250K, it's a $0 tax. It's called a "marginal tax" - one that applies ONLY to income OVER $250K. Educate yourself.
Re:Fight back (Score:4, Insightful)
a little extra tax that won't impact their lifestyle but will offset the negative effect they are having on everyone living around them?
That's the dual fallacy of bleeding heart liberals, especially those who don't have themselves a decent income.
First, that wealthy people have a negative effect on people living around them. That's simply not true, you're just demonizing people that *you don't know* for the sake of justifying the theft of their money. Second, tax money doesn't "offset" negative effects, they simply make the city adminisitration fatter and more powerful.
For people who want to help the poor, there's charity and various NGOs. Leave the others alone and take your socialist views to one of those successful socialist countries, as soon as you find one.
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First, that wealthy people have a negative effect on people living around them. That's simply not true, you're just demonizing people that *you don't know* for the sake of justifying the theft of their money.
Ah, the poor victim mentality. Note that I didn't demonize anyone, you imagined that because you are unable to overcome your prejudices about me. I don't know exactly who or what you think I am, but I'm certainly not demonizing the well paid people working for Amazon here.
Second, tax money doesn't "offset" negative effects, they simply make the city adminisitration fatter and more powerful.
That's clearly bollocks. I guess when they hire an extra person to collect the refuse from the new McMansions, that's just the city getting fatter and more powerful, not providing a useful and necessary service.
For people who want to help the poor, there's charity and various NGOs.
In other words, you prefer b
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Ahh, one of the many fallacies of the ignorant right who have never earned over US$25,000 and still swallow the line that the rich have it hard whilst they push more of the costs onto you because you wont even question it.
Sorry sunshine, but evidence from London to Singapore to NYC have demonstrated the vaunted exodus of the rich to be false. The amount of tax you pay to live in central London is insane and it's not a ghost town. Same with living anywhere in Singapore or Hong Kong... but people still pay it
Is this additional income tax? (Score:4, Insightful)
Re:Is this additional income tax? (Score:5, Informative)
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>"I mean where I live you are happy to get 50% of your income after tax."
In reality, it is probably far, far less than that but in a way most people don't think about. Most people still believe the only taxes they pay of any real meaning are income taxes, sale taxes, and perhaps gasoline and property taxes (forgetting sin taxes, communications taxes, tickets, taxes hidden in water and sewer bills, entertainment taxes, "death" taxes, hundreds of different licensing fees which are all taxes, tolls, waste
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The percentage of tax you pay is not all that relevant... What matters is what you get in exchange. If you paid 80% tax but had no bills at all (energy, water, telecomms, good food, lavish housing etc. provided for you) then you probably wouldn't mind too much. Similarly, if tax was 5% but you got nothing, had to pave the road to your house yourself, had to pay the cops to protect you, dispose of your own rubbish and stop people disposing of theirs on your property etc. you probably wouldn't be too happy.
Of
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The "liter" tax on liquor is obscene; not so much a sin tax as a "sure, we'll privatize booze sales as long as we get to keep collecting an amount equivalent to the profit we were making" tax so its a 20.5% tax in addition to the regular sales tax. Can't speak to cigarettes; I don't smoke. Don't know about a special tax on chips and salsa or a tax on fast food other than the "prepared foods tax" that is similar to other state's restaurant taxes but is 10%. Groceries (including candy and soda) are not tax
Re:Is this additional income tax? (Score:5, Informative)
Maybe a state versus federal thing? I don't know, from a non US standpoint 2.25% income tax on $250k seems almost comically small, so intuitively I'd guess it's in addition to existing income tax(es). Heck I get less than half that and I'm paying over 30%.
If you make $250,000 you fall into the 33% bracket (between $191,650 and $416,700), so you nominally one would pay $65,899.25 or 26.4%. Of course that is before any deductions and is different if you are married, but overall someone making $250k will generally pay 20-25% in federal income taxes (plus 6.2% for Social Security and 1.45% for Medicare) .
Washington Policy Center (Score:5, Interesting)
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Just because they say it, doesn't mean they're wrong. That said, I see no mention of the word income in the whole WA state constitution.
Re:Washington Policy Center (Score:5, Informative)
RCW 36.65.030 [wa.gov]
Searching the Revised Code of Washington for the single word "income" results in 2,266 hits.
Please penalize yourself 10 Karma points for sloppy research.
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I notice the American Right wing (Score:5, Insightful)
Re:I notice the American Right wing (Score:5, Insightful)
They're in favor of SMALL (ie, less) government moreso than local government.
In general most conservatives have no issue with a higher level of government saying to a lower level "No, you can't do that".
You know how when Linux geeks say "I just want the OS to be unobtrusive and stay out of the way so I can work."? Apply the same logic to government.
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They're also a fan of local control - until they're not. Almost like they are hacks that use arguments right up until they can be used against them, at which point they are promptly discarded.
I don't see that (Score:2, Offtopic)
I think the quote goes something like this: Socialism for the Rich and Dog Eat Dog Capitalism for the Poor.
Says a Leftist... (Score:3, Insightful)
Because the sure fire way to up your standard of living is under Socialism right? If you had not noticed, that only works in rare cases with certain people in power. Didn't work out well for most of the world, and sure as hell keeps people wanting to move out of even the best of the socialist countries. Talk to a Fin, German, or Swede about their great economic mobility opportunities. (real people, not fabricated media reports).
Notice that there is no mention of "local" Government in our founding docume
Re:Says a Leftist... (Score:5, Informative)
Because the sure fire way to up your standard of living is under Socialism right?
I don't know that it's clear which is ultimately better; the modern form of socialism (which is capitalism with a strong safety net funded by heavy taxation), or something closer to pure capitalism (pure capitalism exists nowhere). My suspicion is that both approaches work, but which will work in a given country depends on the local culture.
Talk to a Fin, German, or Swede about their great economic mobility opportunities. (real people, not fabricated media reports).
That's stupid. If you want to know about such things, you don't seek out anecdotes, which may tell you very different things depending on whom you encounter, you look for data. Common measures of economic mobility put Swedes, to pick one country, far above Americans. Some more recent research questions those measures which focus only on single-generation changes and look at multi-generational mobility. By those measures, Swedes have roughly the same level of economic mobility as Americans. I don't see any data that indicates they have less mobility than Americans.
That said, I strongly suspect that a regional analysis of the US would yield a different result, because we know very well that mobility varies greatly across different regions of the country. https://www.theatlantic.com/bu... [theatlantic.com]. Perhaps people in Salt Lake City (per that 2014 study, the city with highest upward mobility for moving into the middle class) or San Jose (the city with the highest upward mobility for moving into the top quintile) are significantly more upwardly mobile that people in Stockholm (or whatever Swedish city has the highest mobility). I haven't found any studies that apply the same measurement techniques to make comparison feasible (and even then such things are tricky). But, as a nation, the US is no more mobile than Sweden, and probably somewhat less, which means that extensive safety nets don't kill mobility, and their absence doesn't guarantee it.
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Citation very much needed. Leaving aside the fact that most people aren't aware of what the constitution actually says, most people are fine sacrificing their rights for various reasons. That's why we don't just have mob rule.
I'd also say the constitution would be pretty different if developed today. I'm not sure fetishizing it as the unchangeable text from heaven is that great. There are a lot of good id
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They're in favor of SMALL (ie, less) government moreso than local government.
In general most conservatives have no issue with a higher level of government saying to a lower level "No, you can't do that".
You know how when Linux geeks say "I just want the OS to be unobtrusive and stay out of the way so I can work."? Apply the same logic to government.
No, they say they are in favor of small government but when the rubber actually hits the road they never actually shrink the government overall. Here [stlouisfed.org] is a graph of the number of federal employees, where are the big decreases when these "small government" Republicans take office? That graph doesn't count the military, which Republicans tend to increase as well. I'm certainly for a smaller government, but neither of the authoritarian parties are going to provide it, they got into this game for power and mo
Re:I notice the American Right wing (Score:5, Interesting)
I notice the American Right wing is all in favor of local government right up until they do something they don't like. Then they want the State gov't to step in and outlaw it. The State gov'ts seem about perfect. Big enough to oppress but not so big they can't just buy them all out.
I think that Seattle gets it wrong, but I support the ability of a local or state government to make this determination for themselves. In fact, I think that the federal income tax should be abolished entirely and that states should be funding the federal governments out of their tax revenues. Of course, this would mean that states would have to tax income more at levels like what the federal government does. In fact, if you study the federal republic concept that forms the basis of the US, that is how it should be. The federal government today is far larger, more bureaucratic, and more powerful than the founders could have imagined.
Right now, if the federal government lowers or raises income taxes, then your only choice is to comply or run afoul of the law. In the state-based arrangement I mentioned above, the federal government would have to convince the states that it is in their best interests to fund whatever thing the federal government is proposing. That would act as a very effective check on the ever increasing power and size of the federal government. On top of that, if states choose not to comply it effectively acts as a form of pocket veto (because you cannot through an entire state in jail). Same as when some countries refuse to pay their UN dues, or whatever. If a large enough amount of money gets withheld then the job can't get done. It would make sure only truly worthwhile things get funded.
But then, I also favor a return to state legislatures selecting Senators. I don not think it likely that either popular election of Senators or the federal income tax will be repealed. But I still think they are good ideas.
Note: I don'y really know why I am replying here, as it seems anytime I pop up in anything even remotely political my posts get hit with an avalanche of "overrated" mods; it seems moderators believe "overrated" == "disagree". At least some of them have the intestinal fortitude to mod troll (even if I am not trolling), but then they probably are secure in their thoughts and ideas and can handle their mods being metamoded. So, I'll probably get modded to oblivion, but oh well.
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In fact, I think that the federal income tax should be abolished entirely and that states should be funding the federal governments out of their tax revenues.
I wouldn't go that far, but a cap of something like 2% on the federal income tax would definitely help. States would be free to increase their taxes to the level the federal one was, and fund whatever programs they find important. Vermont, California, Massachusetts and NY can have universal healthcare. Midwestern states can save for their own tornado reconstruction funds. Florida and New Orleans can have universal flood insurance. The farm states will lose their subsidies but in exchange their tax burd
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Unconstitutional things remain unconstitutional regardless of how you feel about it.
On the left tho.... that whole Rule of Law thing just gets in the way.
Flat tax (Score:2)
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I don't think you understand how percentages work . . . yes it's a small percentage, but it's pretty much the polar opposite of "flat".
Should've Kept Their Trap Shut (Score:5, Funny)
Washington's constitution states "a county, city, or city-county shall not levy a tax on net income."
Hope the rich enjoy their tax being based on gross income. Those 'tax writeoffs'? Not so writeoff-able anymore. No response to the 'income is actually property' precedent except "bullshit!".
If it goes into effect it won't stay at $250K (Score:5, Insightful)
Which rich will be taxed? (Score:3)
Residents of Seattle city proper? Or those who work and earn income within the city? Either way, this will end badly.
I neither work in, nor live in Seattle. But I do live nearby. I wouldn't put it past Seattle to demand income data (and tax returns filed) by everyone living in the region. Just to make sure that a few of the 'evil 1%' aren't trying to slip through the cities tax net with a suburban PO box.
And I see the state being a big pussy and backing Seattle's data demands. To date, I have no obligation to report my income to any Washington State entity, as we have no state income tax. I see this ending. And I see a bunch of local politicians mouths watering when they see the spreadsheet calculations of what they could be taking.
Oh Good (Score:2)
Because if it's one thing that the wealthy aren't good at it, it's rewriting these kinds of laws to punish the foolish who try to implement them. /s
May as well have posted that they have finally unveiled a working perpetual motion machine.
You can not tax your way out of wasteful spending (Score:2, Insightful)
https://www.usnews.com/news/be... [usnews.com]
http://www.kitsapsun.com/story... [kitsapsun.com]
http://www.investopedia.com/ar... [investopedia.com]
You can also see it in the cost of a 26' UHaul between Texas and California/NY
Los Angeles, CA to Dallas, TX: $2,558
Dallas TX to Los Angeles: $1,232
NY, NY to Dallas, TX: $2,772
Dallas TX to NY, NY: $653
Taxed on business or person location? (Score:2)
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What a moronic statement (Score:2)
"income is property and under the constitution, property tax has to be taxed uniformly and no more than 1 percent."
Yea? Explain why I'm taxed way more than that on my paycheck, please.
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$250K will get you a cup of joe in Seattle.
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This is ridiculous, how pampered are you? $100k might be pushing it, but $250k for an INDIVIDUAL is most definitely "rich", and if you feel threatened by it, good.
Re:$250K is the definition of the evil 1% (Score:4, Insightful)
Why good? Are you saying he didn't earn that money?
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Close, but not quite - as another mentioned it doesn't matter how much value you provide, but how difficult/expensive you are to replace. As an example consider exactly how valuable is it to have working water, sewer, electric service, and other utilities. Then ask yourself, are the people actually on the ground maintaining those systems being paid more in line with the value they provide to society, or the ease with which they could be replaced?
And that is the heart of the discussion about the difference
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It's not rich. RIch people don't have to work. That's rich. Rich people have people to do their yards, clean their pool, cook their food, clean their houses and drive them where they want to go in a car that cost more than I'll make in my lifetime. That's rich. 250K is living comfortably with no worries.
Re:$250K is the definition of the evil 1% (Score:5, Insightful)
Its really depends on your lifestyle and how good you are with your money. Factors, like kids, marriages, do you need new shit all the time, are you a compulsive buyer or are you complete coal smuggler.
I've found that how you spend ends up dictating your financial situation almost as much as your salary.
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Rich people have people to do their yards, clean their pool, cook their food, clean their houses and drive them where they want to go in a car that cost more than I'll make in my lifetime. That's rich. 250K is living comfortably with no worries.
You've just described a well paid techie's life in Seattle or the SF Bay Area
They buy a townhouse or highrise condo, so someone else takes care of the landscaping; the pool cleaning is included in the HOA; they get free food at work and when they are at home they get meals delivered; they have a cleaning service come once a week to clean the house; they have their Uber driver take them where they want to go.
I don't make nearly $250K but could lie such a lifestyle if I chose.
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$250K is plenty. I make half that, and live in the Seattle area, and I'm quite comfortable. Big house, 3 cars, 2 kids in private school. By the standards of a spoiled brat I'm just middle-class, but by any sane definition, I'm well-off. $250K a year in Seattle is rich, and anyone who says otherwise just needs to adjust their expectations.
Comment removed (Score:5, Insightful)
Re:$250K is the definition of the evil 1% (Score:5, Informative)
*Most* americans live paycheck to paycheck and are vastly in debt
This is true, but except at the very bottom it has almost nothing to do with income. Plenty of people making >$250K also live paycheck to paycheck and are vastly in debt. Whether or not you're living at the edge of your finances has much less to do with how much money you earn than it does how you spend. I know families of six that live on $25K annually and have money in the bank and no debt other than the mortgage on their (old and very small) house. I know DINKs that have combined incomes of $400K annually but every cent is pre-spent, and any unexpected expenses go on credit cards. There's a *huge* difference in the way those people live; the difference is larger than $375K per year, because the former live below their meager means while the latter live above their ample means.
Being rich or poor is somewhat determined by choices and effort, but mostly determined by luck. Living paycheck to paycheck, however, is almost always due to choices. Note that I said "almost", because there are exceptions; cases where people who do live below their means get slammed with some impossible expense (e.g. medical expenses) which sucks up their savings and leaves them with unmanageable payments, perhaps garnished from their wages. There are also people who live on disability income which will evaporate if they save any money (stupid, stupid policy). But *most* Americans who live paycheck to paycheck do it by choice, though few of them believe it. But have them sit down with a decent financial planner who will help them identify where their money goes, optimize it (which may involve moving, since many are house-poor), and create a budget that enables them to save, and they can stop living that way.
Personally, I used to live paycheck to paycheck, on a $100K income, until I realized that I was being stupid and took control. Granted that it's a lot easier to take control of your finances with $100K income than with $25K income but it's totally possible for the vast majority even at the bottom end of that range. There is a point below which living just about becomes impossible, of course.
Re:$250K is the definition of the evil 1% (Score:4, Interesting)
The trouble is that those on the low end INVARIABLY end up with some huge and impossible expense. Because life just throws that shit at people. And when you've never earned enough to cover more than the basics, saving money has never really been an option - and the expenses that dumb luck throws your way are usually bigger than you could ever possibly cover with those savings, so debt becomes the only option - and even those who had spent years or decades being responsible are driven to abject poverty by dumb luck.
You mentioned medical expenses but there are so much more - a 45 dollar parking ticket you can't pay, handed over to a private debt collector firm will likely end up being 3000 dollars or more by the time you manage to pay it off. That only ever happens to those who don't have the 45 dollars when the ticket comes of course. This happens with alarming frequency in America.
And of course, crap luck tends to come in bunches. I am a high-earner - and I was nearly destroyed by a series of bad luck events. It started when my daughter needed a life-saving operation -and the insurance refused to pay. Massive bill - and it had to go on a credit card that was only supposed to exist for emergencies (no remember - I was debt-free the month before). That same month my car's engine blew up - and since I have to get to work and have no feasible public transport in my city, that had to be paid on the credit card too. A few more bad things happened -and within 3 months I went from zero debt to owing roughly 5 times my monthly salary in short-term debt - most of it credit card debt.
Suddenly debt repayments was eating up 2/3rds of my monthly income - leaving just barely enough to cover the bills and food. I was actually shifting food money into a seperate account on payday so that, if I fall short, I guarantee my family can eat even if that means missing a bill !
I was lucky though - being a high earner I had made investments, specifically I owned an appartment in a very expensive neighbourhood which I was renting out. In the end - that gave me a way out of this debt trap. I sold the apparthment AND my house, and bought a nicer, bigger house which was, nonetheless, cheaper than the combined value of both properties - sufficiently so that I was able to pay of all the debt. I now only owe my house bond and my car financing. But how many of those 25K a year people do you know who own an upscale appartment to rent out ?
And of course, the price I paid for my decision was to lose that valuable investment. That appartment was worth far more in rental income over the long term than it would ever sell for. I had to cash in the smaller value, because that money comes today.
That income was supposed to be part of my retirement, now I'll have to make that up with other investments and hope I never again end up with a series of bad luck bills that force me to use up all my savings, go into debt and cash in my investments to survive.
Re:$250K is the definition of the evil 1% (Score:4, Insightful)
Given how frequent stories like this are in America, it always baffles me that Americans are so vehemently opposed to the kind of social healthcare enjoyed by Europe. When even the rich can be stung badly by medical bills and uncooperative insurers, it seems odd that they would reject the idea of getting rid of the insurers, paying a similar amount in tax instead, and getting healthcare for everyone without the risk of people missing out or being shafted by their insurers.
I know it's all about that dreaded T-word. Americans hate the idea of being taxed. But really, the way things are set up now, you're effectively paying the same money to a private company. It may just as well be a tax.
The American mind is trapped by ideology and propaganda. We have a strong myth of the self-made man who pulls himself up by his bootstraps, without help from others. The very wealthy perpetuate that myth because it serves to insulate them from judgement about the degree of their wealth. The money a person has "earned" is theirs to do with as they please, regardless of how disproportionate it might be or whatever else might be true. You see this in the irrational anti-tax attitudes you mentioned as well.
The lower classes have also been conditioned to fight each other rather than band together. This is again by design. The owners have historically pitted groups against each other to keep them from uniting against a common enemy. So when people see public sector union workers (for example) getting benefits, they want to take those benefits away rather than ask why they also are not receiving those benefits.
What this means is that many people vote for values rather than policies. They vote for the person who will maintain or implement the proper order of things, as they see it. Basically, they are more concerned with making sure the next guy is as miserable as they are, than they are with creating a shared prosperity.
Re:$250K is the definition of the evil 1% (Score:4, Informative)
So, if that is your definition of "rich", what do you define Warren Buffet and Bill Gates as? Because I assure you their lifestyles are way different than a 2000+ sqft home and a latte every day.
No, there's in fact alot more Americas then that, but for some reason you people just love forgetting an actual "rich" exists, by calling most of the working class "rich" and just lumping in the billionaires, as if those two classes are even remotely comparable.
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Warren Buffet and Bill Gates are such outliers that they don't belong in this discussion at all. And the point of the two Americas meme is that in one of them, you don't get the most basic needs met, and in the other you do. Anything beyond that is fluff. In the case of Buffet and Gates, some very high-priced fluff. But non-essential fluff nonetheless.
Buffet and Gates seem to realize this - having pledged to give most of it away. It's those deluded folks that 'aspire' to be Buffet and Gates that don't
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If you can afford a 2000+ sqft home, you are rich.
Bullshit. Middle class people can afford 2000+ sqft homes throughout the US. That doesn't make them rich.
If you can afford to buy a decaf latte grande every day, you are rich.
Again, bullshit. A latte is $3. It's not fucking Patrón. Middle class and poor folk buy lattes every single day. It doesn't make them rich.
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$3 multiplied by 365 days equals $1095. If you make around $25K that means you'd be wasting 4% of your annual income on coffee. Get real.
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Hyperbole much? If you can't make your case without resorting to exaggeration then perhaps your case is not so strong.
"Would kill to..." is a common figure of speech, so not really exaggeration. And the sentiment is true - in many areas of the country, working at walmart is a lucrative job and something to aspire to. Sure beats rinsing blood and guts out of the slaughterhouse (which was an actual job for unskilled laborers in the midwest town where I grew up)
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$200K would put you in the top 13% of households in Seattle. Not sure where 250 would be.
http://www.city-data.com/incom... [city-data.com]
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Given the tax is on individuals I imagine $250k would easily place you in the top 1%.
Using a very conservative assumption that the highest Seattle income is $250k;
- Seattle population: 705,000
- Estimated new tax revenue: $140,000,000
- New tax rate: 2.5%
140,000,000 / ( 250,000 * 0.025 ) = 22,400 people earning $250k
22,400 / 705,000 = 3.2% of the population
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Just realised 705,000 is the CBD population. Not sure the population to which this tax law would apply but it could be up to 4,500,000 people, making the ultra-conservative calculation more like 20%.
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It doesn't define you as rich. What it does is provide a workable cutoff point for the government. Two items to consider:
1) As the government you want to make sure you don't offend too many people. You need popular support when you go to confiscate money from people. So, you set the bar where the number of people who are not affected is sufficiently large to garner support, or at the very least apathy, from a significant portion of the population.
2) As the government you want to make sure that when you
Re:$250K is the definition of the evil 1% (Score:4, Interesting)
When it comes to federal income tax at least, the rates are all marginal. The top tax rate is 39.6%, but that doesn't mean if you make $500k you're paying 39.6% of that. Rather, you only pay 39.6% of everything you make over the limit. You'd pay 10% on the first $9325, 15% on $9326 to $37,950, etc etc on up the scale. You only pay 39.6% of the last $81,599, since the 39.6% kicks in at $418401+ (as of 2017 at least).
So if it's 2.25% of everything over 250k, that's not going to kill anyone making that sort of money, because the guy making $251k owes exactly $22.50.
Re:$250K is the definition of the evil 1% (Score:4, Informative)
It's marginal. Here's an article with a bit more detail [king5.com]
So yeah, Mr. $251k owes $22.50.
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Your math is very wrong. FTFA: 10k ppl=$140m, that is 14,000 per person, averaged. Said another way, 250,000*.0225=$5625.
Are you completely ignoring the fact that this discussion thread right here is about the tax being marginal?
The only way it makes any sense to calculate 2.25% of 250K is if someone makes $500K, so they make 250K over the threshold.
The average 14K pp estimate suggests that the average wage they're looking at is 14,000/.0225 = ~620K ABOVE the 250K threshold, so $870K/yr.
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Income is "property"? I thought it was the state next door that had legal cannabis.
Sounds like there's a whole slew of existing laws that counter this new one, but equating a cash flow with static assets makes the "corporations are people" concept seem downright pedestrian. At least corporations do some of the same things that people do, even if the State of Texas has yet to administer lethal injections to one.
Re:Illegal? (Score:4, Informative)
It is legal for many cities to collect income tax--you are right, many cities do that. But not in Washington state, because the state constitution expressly prohibits it.
Not illegal by my reading (Score:5, Informative)
The relevant sections are on pages 26 and 27 of the Constitution's text, available online here:
http://leg.wa.gov/lawsandagencyrules/documents/12-2010-wastateconstitution.pdf [wa.gov]
Specifically (italics mine):
There follows three long passages describing the conditions under which such a "taxing district" may exceed the 1% aggregate taxation limit defined previously on page 26. Whether Seattle's particular circumstances meet those conditions, I have no particular comment. I post this merely to point out that Seattle, as a city government, does have a constitutionally viable mechanism for imposing its own tax scheme.
Cheers,
Re:Illegal? (Score:4, Informative)
It is absolutely legal for a city to collect income tax. MANY cities do just that.
You missed the part about the Washington State Constitution banning city income taxes. NY City is not in Washington.
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Private sector doesn't get to 'create' jobs. That's not how it works.
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Fully agree! Heck, if we just pegged the budget increases to inflation plus population growth (cost of delivering services plus increase in service demands) we'd grow ourselves out of a deficit in about 12 years (GDP tends to grow faster than inflation plus pop growth, and Hauser's Law gives us faster tax receipt growth over time). But the Federal Government continues to accelerate its spending faster than reasonable, and claims it's not taxing enough.
There are calls always to increase tax rates back up t
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Back in those days, the Federal Government collected less than half it does today, per capita and adjusted for inflation. And the last time it actually lived within its means (no deficit) was 1957. When it was collecting half of what it is today. Perhaps the issue is spending has spiraled out of control - amount and what it's spent on - and that's the problem...
PS: you are part of the rich, at least on a global level...