TL;DR: taxes are hard, do you have a reference?
A progressive income tax like this prevents situations where someone getting a small raise that moves them I i a higher tax bracket could actually leave them WORSE OFF than they were before the raise.
https://taxfoundation.org/2017-tax-brackets/
https://www.irs.com/articles/2016-federal-tax-rates-personal...
It's how tax brackets work. Notice the "+X% over the excess / of the amount over" wording in the documents. I'm not a CPA, so maybe one can chime in with a counter example of someone who would take home less if they made a larger salary. But I'm pretty certain this is how it works.
Even if the limit was 250k, how would a family earning less than 250k feel the tax? It would literally cost them $0 per year since only income above 250k are taxed.
From [2]:
Tax Filing Status Total Income Rate
“single” Total income in the tax year up to $250,000 0%
Amount of total income in the tax year in excess of $250,000 2.25%
“married filing jointly” Total income in the tax year up to $500,000 0%
Amount of total income in the tax year in excess of $500,000 2.25%
[2] http://seattle.legistar.com/LegislationDetail.aspx?ID=308547...
Inflation already does the dirty work.
I can't find detailed enough information to say what percentile a $250k household income in Seattle actually is. What I can find, from the 2015 census estimates, is that $200k is 87th percentile [1].
[1] As aggregated here: http://www.city-data.com/income/income-Seattle-Washington.ht...
A family of 4 could live pretty well on half that in Seattle. Maybe they aren't "rich" as in "filthy rich", but I don't see how they'd actually feel it, other than savings goals having to be slightly less aggressive.
At $250,000 / year, your pre-tax monthly income would be about $28,833 and a tax of 2.25% would shrink that by $468. I don't see how I could honestly say I felt the tax if I made only half of 250k and they double it to 4.5%.
Yes, kinda. My family earns in the range of 20% lower than the lowest bound there and we live in the Bay Area. We're at the very least affluent. I would never say "rich", because I reserve that for folks who don't have to work (i.e. they could live off unearned income in perpetuity and readily absorb more than one significant shocks, such as medical expenses, if they chose to), but comparing our situation to even middle-class folks is a bit laughable.
This is misguided and unconstitutional.
"Rich" refers to a lifestyle that cannot be afforded by just $250k.
An example would be:
- Private school
- Vacation home
- 3+ luxurious vacations a year
- Saving $50k+ per year
- Eating out at fancy restaurants weekly
- Seeing expensive shows weekly
- $1+ million dollar home ($3.5+ million if you're in the Bay Area)
so 50+24+15+20+20+60=189 Oh shit look at that, there is room for savings/taxes too!
(numbers are yearly cost, not monthly or total cost)
http://blogs.seattletimes.com/fyi-guy/2014/10/06/as-seattle-...
This is targeting the top 20% of earners in Seattle. Time will tell if this is a sound policy. I think they could have achieved a similar level of tax by having a higher level of tax aimed at a much higher level of income (1 million plus). A family earning 200-250K in Seattle will definitely feel this tax. You still operate at a high level of privilege at that income level, but it isn't crazy. For comparison, according to cost of living indexes, if you earn 250K in Seattle you would need to make ~385K in SF, or only 140K in Atlanta. In Atlanta 140K is comfortable, but not "rich". I really think these sort of taxes should target the top 5% of earners only -- everyone below that actually feels it and is not "rich", especially in higher cost of living areas like Seattle.