Wednesday, June 14, 2023

TOO MUCH ........

 Sorry folks ....but there is  no way i would pay 100k in taxes......... to live in Portland Oregan ......why........ well it is a bunghole .........and........ not even nice ........i have not heard one person tell me that Portland........ is the  great place .........or  greatest  .........however....... i have heard it is bad  with smack/H/dragon/heroin ......i mean why would anyone want to pay that much....... and  deal with all the probs......... related to Portland  .....oregon .........although........ i heard  the only thing that came out of  Portland Oregon .......was  grunge........ and  nirvana ...........which i was  never a  fan of  .........unless  anyone  knows  ......... any other export .......and i hear it rains....... and it is  really...... really cold the winter .......and the 4 other cities are  extortionate too ........feel bad for those  landed with huge tax bills ..........

People making $250K a year in Portland pay more than $100K in taxes — here are the top 5 US cities where Uncle Sam hits high earners the hardest

People making $250K a year in Portland pay more than $100K in taxes — here are the top 5 US cities where Uncle Sam hits high earners the hardest
People making $250K a year in Portland pay more than $100K in taxes — here are the top 5 US cities where Uncle Sam hits high earners the hardest

An annual income of $250,000 will put you firmly in the top 10% of earners in the U.S., but in some cities your purchasing power would be less than half of that figure due to taxes and the cost of living.

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High-income earners in Portland, Oregon, are penalized the most in taxes when jumping from $100,000 in salary to $250,000, according to a new study by SmartAsset, a consumer-focused financial information provider.

People making $250,000 a year in Portland effectively pay about 41.1%, or at least $102,750, back in taxes, the study reveals. When adjusted for the local cost of living in the City of Roses, their purchasing power drops to $120,542.

Portland, however, is far more affordable compared to metropolitan hubs like New York City and San Francisco, where high income earners also face heavy tax hits but much steeper living costs.

Here are the top five U.S. cities where Uncle Sam hits high earners the hardest — and what you can do about it if you fall into that tax bracket.

Cities with the highest tax rates

On average, people making $250,000 per year in the 76 largest cities in the U.S. pay about 34% in taxes, according to the SmartAsset study.

Meanwhile, taxpayers who make $100,000 in the same 76 cities are subject to a tax rate that’s nearly five percentage points lower at about 29.3%.

The five cities with the highest tax rates for $250,000 earners are:

  • Baltimore: 41.3%

  • Portland: 41.1%

  • New York: 39.5%

  • San Francisco: 39.5%

  • Honolulu: 38.5%

Portland was rated the least favorable city for high income earners because the tax rate spikes from 33.6% for those earning a $100,000 salary to 41.1% for those earning a $250,000 salary — a 7.5% jump and the highest increase in taxes between these salary levels in the 76 cities.

In comparison, residents with a $250,000 paycheck in New York, San Francisco and Honolulu are taxed roughly 6% more at this income level than those earning a $100,000 salary.

Read more: Americans refuse to let higher prices derail their travel plans — 10 tactics to keep your summer vacation on budget

Purchasing power and the cost of living

You can’t determine someone’s purchasing power just by looking at their tax rate. You also need to factor in the cost of living in their city.

This includes the price of housing, groceries, utilities, transportation and other goods and services. For this study, SmartAsset used cost of living index data from the Council for Community and Economic Research for the third quarter of 2022.

Despite having the highest tax rate for $250,000 earners, Baltimore’s cost of living is significantly lower than uber-expensive cities like New York, San Francisco and Honolulu — at just 8.1% higher than the national average, compared to 83.6%, 82.8% and 86%, respectively.

If you look at the price of housing alone, the average Baltimore home value is $178,704 as of June 12, according to Zillow. This pales in comparison to the average home values reported by Zillow in New York County, San Francisco and Honolulu — at $1,199,964, $1,273,464 and $799,779, respectively.

It’s not surprising, then, that in Baltimore, a $250,000 salary goes a lot further — at $135,798 — after factoring in taxes and cost of living, than in New York City, San Francisco and Honolulu, where the same salary feels more like you’re making just short of $83,000 in all three cities, according to SmartAsset.

What can high income earners do about it?

If you’re a high income earner feeling the brunt of Uncle Sam’s tax rates, you could consider moving to a city with a lower tax rate — but remember that employers could adjust your salary based on the cost of living in your new city or state.

If you earn $250,000 for a job in New York City, you might not retain that salary if you were to move and do the same job in Memphis, Tennessee, for instance, where SmartAsset notes the cost of living is 13.8% lower than the national average.

Most of the lowest effective tax rates on $250,000 are in places with no state income tax, such as Seattle and Spokane in Washington; Plano, Austin and Dallas in Texas; Miami and Orlando in Florida; Reno and Las Vegas in Nevada; and Nashville, Tennessee.

It’s also important to note these cities often compensate for that tax revenue loss in other ways, like levying higher property or sales taxes. You have to understand the full picture before making a move.

If you’re not keen to hit the road, there are other things you can do to manage your tax liability — like making the most of tax-friendly retirement vehicles.

For instance, you can max out your 401(k) with pre-tax contributions, which could lower your taxable income by $22,500 in 2023. If you don’t have a retirement plan at work, you can contribute up to $6,500 ($7,500 for those 50 and older) to a traditional individual retirement account (IRA) this year, again lowering your taxable income.

If you’re enrolled in a high-deductible health plan, you can also make a $3,850 tax-deductible contribution to a health savings account (HSA) in 2023 — which has been described as “the ONLY investment account that is truly 100% tax-free.”

Finally, if you’re not concerned about reducing your taxable income, but you’d still love to turn the tables on Uncle Sam, you can invest in real estate investment trusts (REITs) that rent to the U.S. government. We all pay taxes, so why not get some money back in quarterly distributions?

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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