O-Trap;1548802 wrote:Naturally, I'm not suggesting the US doesn't have plenty yet to offer, and the taxes here are still not as bad as they are in other parts of the world, but what worried me was that the guys I mentioned all list the tax burden as being one of the main reasons for their emigration (if not the top reason, itself).

Granted, I don't blame them. I just don't like that as a trend, and I can't imagine it being healthy.

Good post, and i agree, can't be anything but a bad thing when he we talented folks leaving because of the tax burden.

I think some of it has more to due with lower taxes offered elsewhere vs. taxes being too high here. Maybe that's a distinction without a difference, but especially on the corporate level is illustrates that tax rates can be a competitive disadvantage (this is why the trend globally, at least among OECD countries, is to LOWER corporate rates).

People - including the vast majority of bleeding heart liberals - will always choose options that minimize their taxes. I'm curious to what happens in CA longer-term with the way they've jacked-up rates. One could live in CA for 180 days a year, and in FL, TX, NV or some other place the rest of the year and avoid paying any state income taxes.

I expect this to be an increasing trend in a digital world where "offices" are more and more virtual, which applies to corporations even easier than it does to employees.

cbus4life;1550752 wrote:Good post, and i agree, can't be anything but a bad thing when he we talented folks leaving because of the tax burden.

Undoubtedly Sleeper would be a major investor, assume a seat on the board and then troll with impunity.

cbus4life;1550752 wrote:Good post, and i agree, can't be anything but a bad thing when he we talented folks leaving because of the tax burden.

The fact that this trend is on the rise is, I think, telling.

As for the steps that have been taken to curb it (ie, taxing them before they can emigrate) just seems to prevent anyone with any substantial wealth from coming back (or immigrating for the first time) because of the threat of having to give it up if they wish to leave again.

As I said, there are still plenty worse places to live, from a taxation standpoint, but I daresay that I don't like trending toward the middle of the pack and using the defense that we still aren't as bad as 'X'. To me, that sounds like justifying not winning a race because you don't come in last.

Those "evil loophole" are what keeps more from leaving. Obviously not everyone has the same options to choose from, but there are many, many perfectly legal ways to avoid and minimize taxes. That's why the "trend" is still a very marginal thing.

I'm also skeptical of people who claim to be leaving because of recent increases in taxes under Obama - capital gains increase from 15% to 20% (plus 3.6% for Obamacare?)....the top marginal rate went up a similar amount....basically an additional 3-4%. You could pretty much offset that by moving to one of the state with no income tax. Even if not, trends or whatever I struggle to think that marginal increase is the straw that broke the back (since we are only back roughly to Clinton rates for the wealthy).

Again, I may be making a distinction without a difference, but I'm saying these people aren't really running from higher taxes so much as their lifestyle offers choices/options to reduce their tax burden. For example, if I'm a CA resident who spends a lot of time in FL I don't have to make major adjustments/concessions to change my residence to FL to avoid CA income taxes.

gut;1550760 wrote:I'm also skeptical of people who claim to be leaving because of recent increases in taxes under Obama - capital gains increase from 15% to 20% (plus 3.6% for Obamacare?)....the top marginal rate went up a similar amount....basically an additional 3-4%. You could pretty much offset that by moving to one of the state with no income tax.

My new boss did just that. He was our plant manager in our Visalia, CA facility and moved to our Tennessee plant. Tennessee has no or little state and local income taxes. He flat out told me that he actually took a lesser job here to avoid California taxation and claims he's far better off.

believer;1550761 wrote:He flat out told me that he actually took a lesser job here to avoid California taxation and claims he's far better off.

Well, it's a 6-10% gain off the top after federal tax (because of no state income taxes). And then obviously COL is much, much lower in TN. Weather, beaches and sunshine is overrated when you spend most of your time working. A $500k home in TN would be amazing, and probably cost you $3M in CA.

Again, this isn't going to be a great example because most companies only give COL increases, not reductions, when they transfer employees. But, yeah, between taxes and COL you could be talking easily 20% change in discretionary income from moving.

gut;1550760 wrote:I'm also skeptical of people who claim to be leaving because of recent increases in taxes under Obama - capital gains increase from 15% to 20% (plus 3.6% for Obamacare?)....the top marginal rate went up a similar amount....basically an additional 3-4%. You could pretty much offset that by moving to one of the state with no income tax.

I can't really say, as I'm not them, though I can think of three that lived in states with no state income tax already.

gut;1550760 wrote:Even if not, trends or whatever I struggle to think that marginal increase is the straw that broke the back (since we are only back roughly to Clinton rates for the wealthy).

I can't even say for certain that it's any drastic rise in taxes (specifically because I don't see any rise as "drastic" at all), but perhaps it is that they've been where they are for long enough, and those leaving deem the level to not be acceptable. I don't know.

gut;1550760 wrote:Again, I may be making a distinction without a difference, but I'm saying these people aren't really running from higher taxes so much as their lifestyle offers choices/options to reduce their tax burden. For example, if I'm a CA resident who spends a lot of time in FL I don't have to make major adjustments/concessions to change my residence to FL to avoid CA income taxes.

To my knowledge, the few that moved to Costa Rica never really were regulars there prior to moving there, and as I've interpreted it, the change in lifestyle has been notable between living in Nevada or Florida and living in Costa Rica.

http://cnsnews.com/news/article/terence-p-jeffrey/cbotop-40-paid-1062-income-taxes-bottom-40-paid-91-got-average-18950


The top 20% now pays 93% of the total tax bill. Mind blowing.

fish82;1551044 wrote:http://cnsnews.com/news/article/terence-p-jeffrey/cbotop-40-paid-1062-income-taxes-bottom-40-paid-91-got-average-18950


The top 20% now pays 93% of the total tax bill. Mind blowing.

If we just tax the rich another paltry 7% they can pay for ALL of it. : thumbup:

fish82;1551044 wrote:http://cnsnews.com/news/article/terence-p-jeffrey/cbotop-40-paid-1062-income-taxes-bottom-40-paid-91-got-average-18950


The top 20% now pays 93% of the total tax bill. Mind blowing.

I don't know how it's sliced, though I'm sure it's not proportional, but if the top 20% made 93% of the income each year, it wouldn't be so odd.

I'm curious what the difference is.

Bottom 40% paid -9.1%...an average of $19k in transfers is just an astounding number - the poverty level for a family of 4 is something like $22k (and $15k for an individual, I think). Although that $19k is deceptive because it's mostly SS/Medicare, which would constitute the bulk of income for retirees.

Socialism isn't reducing poverty nor is it shrinking the wealth gap. It appears mostly to only be effective at destroying the middle class.

O-Trap;1550979 wrote:...and those leaving deem the level to not be acceptable. I don't know.

It's just curious to me, because unless they are "recently" wealthy the rates aren't any higher than under Clinton which begs the question why they didn't leave 15 years ago. Maybe because of children leaving earlier wasn't an option?

gut;1551161 wrote:Bottom 40% paid -9.1%...an average of $19k in transfers is just an astounding number - the poverty level for a family of 4 is something like $22k (and $15k for an individual, I think). Although that $19k is deceptive because it's mostly SS/Medicare, which would constitute the bulk of income for retirees.

Socialism isn't reducing poverty nor is it shrinking the wealth gap. It appears mostly to only be effective at destroying the middle class.

Historically speaking, I agree. Thanks for the numbers.

gut;1551166 wrote:It's just curious to me, because unless they are "recently" wealthy the rates aren't any higher than under Clinton which begs the question why they didn't leave 15 years ago. Maybe because of children leaving earlier wasn't an option?

Some of them are definitely "recently" wealthy, as a few of them are younger than me ... millionaires in only the last three or four years.

I can only think of one who has been wealthy since prior to the W years, and he does have kids. I don't know why he chose last year to leave. Maybe it was how long it's been going on? Like holding your breath. It's not particularly good for you, but it's palatable in a short spurt. After awhile, though, the same thing you've been doing for a little while now becomes less and less bearable.

I don't know if that translates. I've never been in that camp.

Since we are talking about money....

http://www.boston.com/business/personal-finance/2013/12/09/rising-riches-reaches-affluence/hcWl4mKfEV3oQZ2klI13UO/story.html

WASHINGTON (AP) — It’s not just the wealthiest 1 percent.

Fully 20 percent of U.S. adults become rich for parts of their lives, wielding outsize influence on America’s economy and politics. This little-known group may pose the biggest barrier to reducing the nation’s income inequality.

The growing numbers of the U.S. poor have been well documented, but survey data provided to The Associated Press detail the flip side of the record income gap — the rise of the ‘‘new rich.’’

Made up largely of older professionals, working married couples and more educated singles, the new rich are those with household income of $250,000 or more at some point during their working lives. That puts them, if sometimes temporarily, in the top 2 percent of earners.

Even outside periods of unusual wealth, members of this group generally hover in the $100,000-plus income range, keeping them in the top 20 percent of earners.

Glory Days;1551230 wrote:Since we are talking about money....

http://www.boston.com/business/personal-finance/2013/12/09/rising-riches-reaches-affluence/hcWl4mKfEV3oQZ2klI13UO/story.html

Interesting metrics. The top 20% will, at some point in their lives, usually spend at least part of their working years in the top 2%.

I'm curious about this statement, however: "This little-known group may pose the biggest barrier to reducing the nation’s income inequality."

How is such a possibility even substantiated?

O-Trap;1551243 wrote: How is such a possibility even substantiated?

Facts are not important to liberals. I like the gem of claiming someone who makes $250k in one year qualifies as "becoming rich", however brief. Defining wealth by income rather than savings is a fairly slanted trick.

I'm not sure what the author's point is, but many such people have a very short time to accumulate wealth from such salaries. Perhaps unintentionally he's illustrated an easy-to-overlook incentive issue - what's the point of working to climb the ladder if, when you finally get there, the govt confiscates most of your income? Those 5 years could very well be 30% of someone's career earnings and the vast majority of their accumulated wealth.

"Interesting metrics. The top 20% will, at some point in their lives, usually spend at least part of their working years in the top 2%."

That is because of two reasons: 1) the top 2% isn't as rich as the "occupy" group thinks they are, and 2) these jobs are short-lived and typically the employees have to take pay cuts. If you are an analyst at Morgan Stanley, or an associate at Cravath, Swaine and Moore - congratulations! You are probably making $150,000-$250,000 in your mid to late 20's.

The downside, no job security at all. The I-banker that worked at MS that moves to a smaller fund, or the Cravath associate that after 3 years gets told that they should seek other options almost always have to go downward, at least in compensation.

"Facts are not important to liberals. I like the gem of claiming someone who makes $250k in one year qualifies as "becoming rich", however brief. Defining wealth by income rather than savings is a fairly slanted trick."

I nominate this as post of the year. It seems to me they live in either a dreamworld or bubble - the bubble being in cushy government or union jobs where employment is guaranteed, regular COLA increases are standard and there actual things called pensions.

This is not real life in the private sector. At our household's highest earning year (in 2006 during the horrible Bush years) we were probably a bit north of $400k in gross (that is pre-tax, take home is about half) income that not only included compensation from working but also from investments and we would be part of the "evil" whatever percent....if we even sniff half of that in the next few years I'll do flip-flops naked up and down the street. We aren't rich. Our largest expense has been our tax liability, our second greatest expense is contributing to our retirement - which won't happen.

And on any single day, my wife or I could lose our respective jobs.

Manhattan Buckeye;1551254 wrote:This is not real life in the private sector. At our household's highest earning year (in 2006 during the horrible Bush years) we were probably a bit north of $400k in gross (that is pre-tax, take home is about half) income that not only included compensation from working but also from investments and we would be part of the "evil" whatever percent....if we even sniff half of that in the next few years I'll do flip-flops naked up and down the street. We aren't rich. Our largest expense has been our tax liability, our second greatest expense is contributing to our retirement - which won't happen.

And on any single day, my wife or I could lose our respective jobs.

You and your spouse make over $200,000 a year gross? You eeeeeevil rich bastard. The IRS will be paying you a visit tomorrow.

believer;1551255 wrote:You and your spouse make over $200,000 a year gross? You eeeeeevil rich bastard. The IRS will be paying you a visit tomorrow.

Yeah and between US/UK taxes (and contributions to retirement) we net about US$80k.

Our rent is approximately US$36k, my wife still has student loans that are another US$4k, our insurance and car payment (1 car) is around US$7k. We have to pay for travel for our families so that is probably another US$2k.

But we're rich, we're the 1% and I count pence just even getting a coffee at Starbucks. And we both work our asses off.

O-Trap;1551149 wrote:I don't know how it's sliced, though I'm sure it's not proportional, but if the top 20% made 93% of the income each year, it wouldn't be so odd.

I'm curious what the difference is.

I don't know the number for last year, but historically the top 20% run about 58-62% of total AGI.

This is why I love liberal logic.

My wife and I, according to liberals, are RICH!

I make north of $100k, but less than $150k, depending on the year/bonus/etc.

My wife works part time while the kids are in school making $8 or $9/hr (can't remember) for 25 hrs a week. She likes it as just something to get out of the house but be home when the kids are.

So, we basically make my income plus about 5% more.

Now, after taxes that is around $75k (3 kids).
Retirement savings, since I don't have a government pension, is around $15k.
House payment-$12k
Student Loans-$12k
Car payment-$6k (2 cars)
Charitable Giving-$8k (trying to get it higher, and should have it higher)
Utilities-$6k
Food-$5k
Gas-$4k
Health Insurance-$5k

That leaves $2k per year for everything else that comes with having 3 kids (clothes, sports, etc) entails.

Yeah, we are not scraping by, but we are very tight on our budget month to month and don't have a lot in a savings account.

And if you don't mind me asking, are you in the private sector? What would happen if your company reorganized or otherwise sold out?

This is on our minds every single day.

Manhattan Buckeye;1551404 wrote:And if you don't mind me asking, are you in the private sector? What would happen if your company reorganized or otherwise sold out?

This is on our minds every single day.

Yup, private sector, and if our company reorganized or sold, I would be out of a job and looking.

I would have to empty my 401k to live until I found another job, and start over again on the retirement savings.

I have done this once in my career already, the first company I worked for after college went belly up, and I had to cash out my 401k to live until I found another job.

I have since started putting MUCH more into it per year than I did then as I saw how fast it went down to $0.

I think part of the reason I have moved jobs so "often" (twice in 12 years, so 3 different companies) is the fear that something like you describe could happen at any time.

The first time I left a job on my own about 7 years ago, the company had just been bought out by a European conglomerate. In the end there were no major layoffs, but I wasn't so sure so I happened to start looking and found a place that was offering 25-30% more money.

That place, 5 years later, starting having some layoffs, and I started looking and jumped ship before they could possibly get to me, found a company willing to pay 20% more money again (so financially the moves have been VERY beneficial).

It is not that I hate my job or can't stay at one place for a long time, I think after getting laid off once when I saw the writing on the wall for a long time, predisposed me to jumping ship early on when I see 'trouble in the waters'.