Jeffco bankruptcy was a confluence of judicial severity and public corruption and financial market ineptitude all due to the sewer system. I could write volumes on it. AL constitution makes home rule next to impossible, which made it worse. Area wide growth is moderate, but not all communities in the metro are thriving (Fairfield for example).
What pushes your marginal tax rate up to 60%? I thought the top tax bracket in England was 45%?
Yep, I got 10 years left in my school district, then I can cash out.
Glad to see people hating on the NHS. Itās terrible and the primary reason I turned down a job offer in London back when I was young and portable.
Thats only the basic tax rates (40% at Ā£50k, and 45% at Ā£125k). Problem as you likely know is that the UK tax structure is riddled with āadjustmentsā that take away allowances for higher earners.
The 60% marginal rate is due to the loss of tax free allowance (Ā£12.57k) that is tapered from Ā£100k to Ā£125k. Here you basically go from 40% to 60% in terms of your marginal tax rates.
If you have a small child in nursery in the UK, you also lose the 15 subsidised hours everybody gets (which they take away when you also make > Ā£100K). The marginal tax rate then actually increases to over 80%.
Its actually possible for a taxpayer in the Ā£100k to Ā£125k band to have a marginal rate over 100% if you also include loss of capital gains/dividend allowance that kicks in now after Ā£100k. i.e if you make Ā£99.99k you will be better off than making Ā£100.01k because you end up paying more tax.
The graph below outlines the problem (this was when the 45% band was set at Ā£150k but the same issue applies as it was lowered in April 2023 to Ā£125k)
The UK has huge issues with going from Ā£50k to Ā£60k gross, as child benefit is removed in a tapered fashion from Ā£50k to Ā£60k. That increases your marginal tax rate to 65% from 40% when you are a single earner that makes Ā£60k and has one child. The next discontinuity is when you go from Ā£100k to Ā£125k gross as I previously explained.
Thats also effectively what stops people from working once they approach these two levels of income, as you are getting back very little Ā£Ā£Ā£ for your work in net terms.
The UKs income tax structure is basically broken in my view as the incentives are completely backwards.
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45% would be income tax. I assume there are other taxes, at least equivalent to how FICA and Medicare taxes bump up the real marginal federal tax rates on wages in the US.
(Edit: Ninjaād by Poly)
A few years ago I was toying around with the idea of moving to Canada, enough so that I started crunching numbers. When I was looking at what my taxes would be if I were to move to QuƩbec, I think I came up with an all-in marginal tax rate of more than 60%, assuming I could be compensated at the same level as in the US.
I enjoy visiting Canada, but not enough that I want to take the economic hit to live there, barring the American political climate deteriorating to something I find too intolerable to live under.
Just curious, but are US tax bands indexed to inflation?
In the UK, tax bands (20% at Ā£12.57k, 40% at Ā£50k and 45% at Ā£125k) used to be indexed to inflation, but these have been frozen for the last six years. And because of the very high inflation that we have been experiencing the last few years, that āfiscal dragā has been similar to getting whacked with a huge increase in tax. The Ā£50k tax band (40% income tax) for example would be Ā£82k if they had continued to index it to inflation.
Short answer, yes.
Long and semi-incomplete answer for federal taxes: IRS provides tax inflation adjustments for tax year 2023 | Internal Revenue Service
There are a couple of other elements not mentioned in that press release that are not impacted by inflation (the SALT limiation ā the maximum amount of state and local taxes we can deduct from income is the first one that comes to mind).
For state taxes, the answer will, of course, vary by state. I believe that most, but not all, states that use tax brackets will adjust those brackets annually based on some inflation measure.
Yes and no. The big one thatās not indexed is the quantity of Social Security thatās counted as taxable income. That calculation has not changed one red penny since 1982.
Itās a myth that if Social Security is your only income then itās not taxable, but thatās a coincidence which will only be true for a couple more years.
Many other items in the tax code are not indexed to inflation either. The SALT cap, the amount of capital losses that are deductible, the income threshold for losing the Child Tax Credit, the amount of the Child Tax Credit, and many MANY more.
I probably wouldnāt leave unless there was impending war
I only speak English so my options are basically limited to Canada, UK, and Australia. Otherwise Iād have to work as a janitor in my new country
I donāt even see myself leaving this state (basically its own country compared to many EU countries)
English is also the official or de facto language of:
New Zealand
Ireland
Hong Kong
Singapore
India
Pakistan
Guyana
Belize
Bunch of places in the Caribbean
Bunch of places in Africa
Bunch of places in Oceania
Maybe more that Iām missing.
Iām not going to leave American for a developing country
Iād consider Singapore, I hear itās clean!
I mean, I wouldnāt classify New Zealand or Ireland as ādevelopingā. I kind of listed them in approximately the order that an American might find them appealing.
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I lump them in with Australia and the UK (I know I know, but I donāt care)
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Lol, ok then!
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I agree with your ranking though (I responded before I saw the edit). Canada is a top contender simply due to proximity. And virtually no āaccentā
There are some Texans I struggle to comprehend
Do your number-crunching before considering Canada, especially if the move would require you to change jobs / put you on a Canadian actuarial pay scale. Itās nice, but that niceness comes at a cost.
That, plus being old enough to not have a shot at getting enough points to qualify for permanent resident status, killed any thoughts I might have had of moving northā¦at least unless/until matters in the US deteriorate to the point that I feel a need to leave to preserve my mental health.
(Of course, if you donāt need to work in Canada, American citizens can effectively live in Canada simply by āflagpolingā the border at least once every six months. However, at the moment non-Canadians canāt buy homes in Canada unless they have status, like PR or a work permit, there.)
Interestingly, I had someone yesterday try to talk me into buying a place in Belize.
I would only stay in Canada for the duration of said hypothetical war.
Iām interested to hear how they tried to sell you on Belize. A cursory glance at their Wikipedia page has turned me off (high incidence of disease, illiteracy, crime)
@The_Polymath One thing to consider that I donāt think was mentioned is that if you have little polynomials then you should consider the impact any move will have on them. Once children are about 7 any move, especially to another country can be very difficult to them in terms of adjusting to a new school and social circle.
Since your life is not in danger and you are evaluating their future discomfort, make sure that the future problems you are trying to avoid are not outweighed by any new problems they will encounter.
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