Here’s my rough estimate of someone who make $250k and live in CA. Fed tax rate is 33% and state is 9%. You’re talking about 42% going to taxes. $250k * 0.58 = $145k – $39k (Married maxing out 401k and IRA) = $106k/12 = $8.8k/month.
Rent = $3k
2 car payments = ~$1k
Daycare = ~$1k/kid minimum, so if you have 2 kids, that’s $2k
Insurance = $300
Fuel = $500
Food = $1k
Misc. expense = $1k
That’s roughly $8.8k in expense = $0 in saving except for retirement. That’s not even considering college fund. If you cut down on food and never eat out, you might save $500/month, but that’s chump change when you’re talking about someone who makes $250k/yr.
If you’re talking about increasing taxes on the people making $250k and reducing taxes on those who make less, then there will be little incentive to have 2 income house if it would put them in a much hire tax bracket.
