Tax Reform Under Trump 2017


#2272

Really, I don’t think there are. Where in the USA does a household income of $21,000 per month (!) not at least make you middle class?

I agree with you that it’s not rich like $1m or $10m, but it isn’t poor.


#2273

Overheard just now at my coffee shop:

“I voted for the fvcker and now I’m paying $3500 more?!” While aggressively pointing at the person he was talking to.


#2274

Seriously, when I was offered $175k to move to Boston (our office was in Cambridge) 6 months ago we were looking at the logistics of possibly buying a house up to $700k and still being able to live reasonably, and most of my coworkers at the time were paying much less for houses depending on the area they wanted to live in (my wife had some specifics for areas she wants to live in).

There are very few places where you can’t live extremely reasonably on $250k unless you are intentionally trying to live the high life.


#2275

That sounds you pricing yourself out not the other way around.

Just because you can’t afford a location doesn’t mean you are still middle class.

A friend of mine is changing jobs from 70 or 80,000 grand living in Philly to $150,000 for a job in NY State. The cost of living is going to be 20,000 higher, but that still leaves him with over 50,000 dollars extra (which he can use to pay down his huge debt).
Which reminds me, I have to learn SAS.


#2276

That’s my point!! We were going to be making $175k and found we could afford a $700k house in the Boston area and still live reasonably well with disposable income. The $700k houses we were looking at were nice houses that we would have lived comfortably in with a not too bad commute. We didn’t do the move because we didn’t think we’d live comfortably, we didn’t move because things imploded and it was better to take a slightly less salary in the much lower cost of living of FLorida where we already live.

My whole point is that $250k would have been crazy comfortable to live in unless you are intentionally trying to live in the most expensive area of a most expensive area. If you can’t live in Boston for $250k comfortably then you are intentionally pricing yourself out of the market, and that’s the case in most job centers in the country.


#2277

I think I once phrased it as such:
If I have a fixed amount of money, and then go out and buy a Lamborghini, to the point that I now have no more money… that doesn’t make me poor or lower class.

It makes me a rich guy who spent his money unwisely. I’m still rich.

If you live somewhere and buy a house in an inflated real estate market for a million dollars… you’re still rich, even if you have decided to funnel all of your money into your housing expenses. Living in those places has tangible value.

This stuff is not measured AFTER we buy all our stuff. It’s not based on your expenses. It’s based on your income.


#2278

It’s not absolute like that though. $50k in NYC is extremely different than $50k in Orlando, Florida. There are measurable differences in living conditions that you may not be able to change because moving may not be an option. At $50k household income even moving to the suburbs of NYC might not be enough, as you start paying extremely heavy commuting and quality of life costs.

As you start getting into 6 figures though the cost of living adjustments become less of a factor and it slides more into the you pricing yourself out of the market rather than the market pricing you out, and at $250k level if you can’t live comfortably then that’s definitely your fault (outside of mass of family medical emergencies or other non-area specific conditions).


#2279

The real problem is the elimination of the personal exemptions. That’s why everyone’s tax bill is going up. That $4k most likely gets taxed at 22-24% for most people, and if you’re a family of 4 that’s just under $4000 more in taxes you owe, which was exactly my situation.

The people in that 22-24% range who have kids (25-28% in the old bracket) are the ones getting fucked. So, precisely middle-class working families.


#2280

But living in NYC has value. Just BEING there, I mean. That’s why it costs so much.

The reason $50k doesn’t go so far, is because everyone wants to be there, so folks can all charge more for everything. But living there is a choice.

Choosing to live somewhere with a high cost of living can’t just be wiped away as an inevitability.


#2281

I mean, to a certain extent. There is literally nowhere else in the country I could be employed doing what I do. I could have a longer commute, or maybe emigrate to another financial capital (possibly not after Brexit…), but I either live in/near London or I effectively have to retrain (and it’s not like journalism jobs covering other subjects are well remunerated, or in large supply right now). I’m not complaining by any means. I’m rich, by any reasonable measure, but the point is it’s not an entirely free choice. People are constrained - by past choices, by family, by lack of a safety net.


#2282

Sorry, I didn’t understand. Thank you for clarifying. You are correct.


#2284

My home is a 1350 sqft ancient 1.5 story place in between affluent and less-so districts of Minneapolis with a falling-apart garage, and I paid $210k for it.


#2285

Sorry deleted by accident. Our home is a smallish 1100 sq/ft cottage, and it cost 250k. School and property taxes are well over the 10k limit as well. We got hosed.


#2286

1200 sq ft (full walkout basement though that could be converted to living space.) 218k (market value is now lower than that.) 1/4 acre lot. Over 5k property taxes - which I thought high but holy crap @DeForrestation, where do you live?


#2287

A suburb about 45 minutes outside of NYC.

EDIT: And no, we can’t move :( We are already more than an hour away from my wife’s family, which is too much as it is.


#2288

Does “Taxable Income over” mean after you’ve subtracted the new allowance?


#2289

No, it means that rate only applies to income over that level. Between 9k and 19k is taxed at the 12% rate, then between 19k and 77k at the 22% rate an so on.


#2290

Sure, I understand that part, but are we starting from a figure of “total wages from work” or from a figure of “total wages from work minus deductions/exemptions” (as it was called until this year. I haven’t looked at the 2018 tax return yet, so I don’t know what they call it now.)


#2291

I apologize, I realized what you were actually asking after I quickly posted. The numbers in that chart are for your total “taxable income”, which factors in exemptions and credits. But since the big change this year is the loss of the “personal exemption” of 4,500 per person, the numbers in the chart are much closer to your actual income (excepting the child tax credit).


#2292

No problem. Unlike apparently the majority of US citizens, I understand marginal tax rates. :)

But as to your point about being closer to your actual income, I’m not sure that is true, at least for me. I have no children, but my personal exemption (and my wife’s) each doubled this year from previous years, yes?