San Diego Housing Bubble News and Analysis

if you have 2 high income people making high 100k, it might be better to stay single than get married on paper.

If you're going to avoid marriage for tax purposes, I think that maybe your priorities are a little backwards.

I agree, it's not something I'd do, but that's something someone else would. Just like pre-nup, divorce, etc. Two people can still live together like a married couple, but they might not want to get that paper that say they're married if it means they'll have to pay more in taxes. A marriage is much more than just a piece of paper. All I'm trying to say is, married couple should not be taxed more than single person.

It is an OUTRAGE to consider someone earning $125k/yr as "wealthy" when that income can't even afford a decent single family home over here in Orange County. People earning $125k/yr already pay 48% in marginal taxes, you want to increase it.. Have you lost your mind?? Have you gone INSANE??

I think you might have misunderstood my point kev374. That's exactly my point, if one person making $125k/year is not considered "wealthy" (which I completely agree with), then $250k for 2 people is not "wealthy" either. Especially if we strive for equal pay among the sexes and a family having double income.

WHAT THE FUCK IS WRONG WITH YOU PEOPLE. 125K is a LOT of money. Concrete example: one of my friends who is under 30, on a single income of less than 80K in San Diego owns his own house in a good neighborhood, that he put 150K down on and drives a (used) BMW 7 series.

If 125K / yr isn't rich to you: YOU'RE DOING IT WRONG!

By your logic, $80k/year is rich too. I know a family with 4 kids who makes no more than $60k/year and are coming close to paying their home (in a good neighborhood) off free and clear as well as owning two cars (free and clear as well). So, I guess if you make more than $40k/year/person, you're rich too. If $40k/yr isn't rich to you: YOU'RE DOING IT WRONG.

It is great sport to bash the rich, and to the average American, $250k per year surely qualifies. But not enough revenue will be generated since this cohort is simply too small in numbers. Probably under 5% of all taxpayers.
Expect Obama and the Democrat-controlled House and Senate to "correct" that threshold to $150k or $100k once in office.

Yes. Demacommies are insane.

As usual, comments and judgements are rushed to with not enough information, this is directed primarily to blue_sky.

If you look at Obamas "blueprint" for his administrations policies well, two points are glaring (for those who choose to exercise intellectual integrity) more government control over the citizenry and more taxes.

Anyone see the bill he is currently sponsoring with Hagel? http://obama.senate.gov/press/071211-oba.... How is that justifiable given the circumstances in our own country?

125k is about 3 times the median. That is wealthy by any standards.

Well, then you support the idea of lowering the bar for increasing taxes for single filer to $125k from $200k that Obama set. All I can say is, good luck to expensive cities like SF, NYC, etc. in trying to find workers to relocate there if Obama hold the same view of $125k/yr/person as wealthy and increase taxes for them.

It is a well known comment that 2 can live together cheaper than 2 people living separately. So $250k for married is probably the same wealth as $150k alone.

A vote for Obama is a vote for much higher taxes. I hope everyone understands that and if that is important to them then they need to vote for McCain.

It just shows how clueless he is about the problems facing the country. Our main problem is the bloodsucking government We need less taxes less government not more.

It's also well known that kids are expensive, so $250k for married couple is probably the same wealth as $100k for single filer if not even less.

No, no. The wealthy of this generation are shirking, not paying their fair share. That's absolutely true. Not advocating socialism or wealth redistribution.

Think. What constitutes income? Everybody knows get a good accountant and you'll pay less than in taxes than the average sucker from the middle class.

Here's the new break down of the two candidate's tax proposals:
tax_impact

If you make more than $112k, you'll be benefited from McCain's tax policy while if you make less than $112k, Obama's plan will help you more. @ $66k-112k, the increase tax saving under Obama's plan will only be ~$290. That's pretty negligible in my view.

The bottom 50% of wage earner pay only 3% of the federal income taxes. The middle class, lower class doesn't pay any tax other then SS.

The top 1% of wage earners. I think that is above $200k or so pay 40% of the taxes.

That is the problem with our system now. Not enough people share in the cost of government. Since half the people don't pay tax why should they care what the government spends? What happens is we have a system ran by the special interests and Government has become its own special interest.

The top 1% also have 33% of the total wealth in this country, and the top 10% around 75% of the total wealth. It looks a lot less unfair once you realize that.

The bottom 50% have something like 5% of the total wealth in the country. It's hard to save when you're living paycheck to paycheck.

It's not that hard to save if you really want to. But that's not the American way. If immigrants can move themselves to the middle class and beyond in less than 20 years, even when they came to this country with nothing more than the clothes on their back. There should be no real excuse for those who are born here to do the same. The only valid excuse in my eyes is physical/mental disability.

Using the calculators at paycheckcity.com, $250k for a couple would translate into a net income of $164,800. $125,000 as a single translates into $79,700 net.

The married couples makes $85,000 net MORE than the single guy. The fixed costs like living and food are about the same or neglibily more. If the married couple has car loans then that may be an additional expense, and perhaps gas.

So, the couple's fixed costs may increase 5 - 10% over a single but their available discretionary income skyrockets making them infact MUCH more wealthy.

It is an OUTRAGE to consider someone earning $125k/yr as "wealthy" when that income can't even afford a decent single family home over here in Orange County. People earning $125k/yr already pay 48% in marginal taxes, you want to increase it.. Have you lost your mind?? Have you gone INSANE??

If you are making 125k and can't buy a house, you should cut back on your spending. No one tells you to live in OC! Move that's the capitalist way :)! Also, People who earn 125k/yr do not pay 48% in marginal taxes unless your accountant sucked!

I may completely misunderstand the tax codes, but if you're married can't file individually or as a couple?

If you don't like the "marriage penalty" file individually. I don't understand the outrage (except by large income earning individuals who want to use their non working spouse as a tax break. If I were one of them I'd be pissed).

Based on 2008 tax info (go here for the calculator), a single person making $125k pays $28,978 in taxes. That equates to $96,022 take home. For a married couple making $250k, they need to pay $61,229 in tax. Which equates to $188,771 after taxes = $94,385.50 per spouse.

I also ran the numbers using PaycheckCity.com and the single filer making $125k bring home $76901.76 (with 0 exemption). While the married couple with 2 exemption bring home $151,669.96 = $75834.98/spouse. I'm not sure what you did to get your # but I'm not getting the same result.

How do you get fixed cost to be the same or negligibly more? Food for 2 people should cost 2X more than for 1 person. Gas is also 2X. Housing should also be 2X since as a single, you can get another roommate to share the cost.

You can't file as individual if you're legally married. That's the way it works. The best you can do is file as "married filing separately" but that's even worse when you compare to single filer.

Lets remember that the CA state income tax is the harshest in the nation. It is probably the most steeply progressive, topping out at about 10%, and especially hits the middle class $50k & up earner.
And CA's treatment of capital gains must be the most punishing in the nation. I recently sold a long-held property, and the state bite was about 60% of the federal take.
Some states, including Texas and Washington, have NO state income tax. Their economies and real estate are doing quite well. Our far-left Sacramento legislators, OTOH, are now pushing for a higher income tax. Another reason the high achieving, high earning middle and upper class is fleeing CA.

In my mind it has nothing to do with wealth. It has everything to do with fair and equal treatment. No way did our founders envision a system where some people would pay 40 times what others paid.

One vote is one vote and no way can 1% of the electorate protect themselves against the other 99%. Its tyranny. We fought our war of independence over many things but one of the main ones was taxation without representation.

Because of this I believe that our tax code is becoming unconstitutional. Our our constitution requires equal treatment under the law and our tax code violates that.

When the majority doesn't pay any taxes they can demand more and more from the minority who is forced to pay. Think about that. Consider we have $100 Trillion in unfunded entitlements. That would have never happened had everyone been paying enough tax to get them involved and to hold government accountable.

The best solution is to not tax income, only spending. That way everyone pays and more people will get involved. Since the "rich" spend more they will pay more in tax then the "poor".

Since the majority can't aford to pay taxes the result should be a drastic cut back in government.

Ideally, our government should be sized to where the average wage earner can afford to pay for it.

John

Some states, including Texas and Washington, have NO state income tax. Their economies and real estate are doing quite well. Our far-left Sacramento legislators, OTOH, are now pushing for a higher income tax. Another reason the high achieving, high earning middle and upper class is fleeing CA.

I am from Washington state. Yes, there is no income tax, but the property tax usually increase every year and the sale tax is high. If I remember correctly, Washington still has the heavies tax burden per-individual. As for economy, Washington is about the same as California. However, since it is run by fiscal conservative democrats for decades, Washington's budge is fine unlike the California. If I can get a job in Seattle, I will move back without a thought (SD feels hollow for me).

If we want to talk about fairness in taxes, we should also look at how the smaller states receive way more benefits from the federal taxes than they put in. California, New York, etc, are paying the lions share of taxes, with a big majority of those funds going towards smaller states. All of the people in small states calling for lower taxes should realize that they're not even paying their fair share to begin with.

I agree. Our system is gradually becoming one founded on redistribution of wealth which is not the way our system was designed to operate.

Until the issue of what constitutes income is resolved in a fair and consistent way, any discussions of the value of relative tax rates by income level are meaningless. Wealth is accrued at the high-end through a variety of channels, both directly and through indirect vehicles that provide access to wealth.

(Low income people have little wealth to speak of, and comparably little income, so ignore the bottom quintile.)

As for the upper four quintiles, wealth distribution has shifted dramatically away from the middle quintiles and towards the upper quintile over the past 30 years. Labor hours per household have increased and household incomes remain stagnant. Explain the relative increase in wealth in the upper quintile? Income, no?

The tax system is skewed away from the middle class and towards the wealthy through the use of sophisticated tax shelters and tax accounting mechanisms. A discussion of tax policy isn't meaningful until it addresses tax avoidance and the definition of income (year over year accumulation of wealth).

Could the savings rate and today's generation of I want it and I want it now mentality exacerbated this distribution? Rich people will always be able to buy all the luxury stuff they want and they can afford it easily. However, today, you have a lot of middle class people trying to look rich or just want those luxury things now. Which in essence, reduced the cash they have to invest to make more money. I see more and more luxury things being bought by the middle class. If they would save more, in due time, they would become wealthy, but we all know the American way is to have our things and to have it now. So, yes, income has only risen in lock step with reported inflation, but spending habit does a bigger number on wealth creation. We all know it's not how much you make, but how much you spend that really matter.

Another example of our spending habit is in the housing market. People of past generation would wait and save for a down payment before buying their first house. But now, you have people going out, buying the biggest house the bank is willing to let them with 0% down, etc. Then they complain they don't make enough. How about spending less, so that you actually have $ left over to save.