Hacker News Reader

Comment by polairscience | Hacker News Reader

In every thread about housing people on HN post wildly outlandish claims about expenses that belie their totally out of touch perspectives. If you make 100K a month (the lower bound of what you just wrote). Let's say you put 25K into retirement. You eat out every meal so 4K food/living budget. That leaves 60K (I'll give you 10K slush fund for savings money or as a general keeping-up-with-the-jones' fund).

60K per month will pay a 4.5 million dollar mortgage. 4.5 million will buy you some of the nicest houses in the bay that aren't mansions. See:

https://www.realtor.com/news/unique-homes/midcentury-modern-...

You are either insane, or out of touch in a way that makes you insane. Of course, you can get a much cheaper very nice condo and "safely" squirrel away phenomenal amounts of cash savings. Expecting to own a high end house in a dense metro are on its own, is a pretty insane expectation.

View on HN

Thanks for your comment. It makes a little sense that the average person might struggle with costs in the US, but it doesn't make sense that the highest earners do.

Don't forget taxes. In that bracket, in California, you're paying 50% of your income in taxes, and so $100K/month is actually $50K/month.

I think OP is overselling the point, but not by nearly as much as people think.

That's not how tax brackets work.

The effective tax would be about 26%.

It's quite a bit more than that. I get total taxes paid of:

Federal: 1240 + 0.12 * (50400 - 12401) + 0.22 * (105700 - 50401) + 0.24 * (201775 - 105771) + 0.32 * (256225 - 201776) + 0.35 * (640600 - 256226) + 0.37 * (1200000 - 640601) = 399938.83

State: 0.01 * 11078 + 0.02 * (26264 - 11080) + 0.04 * (41452 - 26265) + 0.06 * (57542 - 41453) + 0.08 * (72724 - 57543) + 0.093 * (371479 - 72725) + 0.0103 * (445771 - 371480) + 0.0113 * (742953 - 445772) + 0.0123 * (1200000 - 742954)

SF property tax on a $4.5M property: 1.18268325% for a total of about $53,220.75

Total: about $493K for an effective tax rate of about 41%, assuming this hypothetical SF resident is single and just purchased their $4.5M property this year.

Sorry, I'm used to people quoting annual salaries and misread the GP.

No. There are many, many more taxes besides what your "effective" tax calculator reports. Every time it seems people have to come out of the woods to educate about "effective tax", but it's not really how it works, and it's how the system has poisoned people into thinking they are paying less tax than they are. Besides your tax return you have all these taxes:

* Self-employment taxes: Lower-income people are usually 1099, and are typically subject to additional 7.5% tax

* Sales taxes: Lower income people typically spend most of their dollars on sales-taxable items, so an additional 10%+ on post-tax amounts, which figures out to additional 15%-ish on pre-tax income

* Health insurance: Lower income people typically have to buy their own health insurance, something that should have been provided by the country but isn't, and is effectively a systematic tax on everyone

* Health deductibles: Insurance sold to lower income people doesn't even cover the first few thousand dollars a year, while higher income brackets pay close to zero deductibles. In many other countries "deductibles" isn't even a thing; they too are an effective systematic tax on lower income brackets fueled by the oligarchy of government and financial powers

* Car registration fees: Registration really only requires paperwork done once; recurring annual "registration" is a tax rebranded as a registration

* Property taxes: Even if you don't own, you pay them -- your landlord passes them through to you

The list goes on and on. Taxes are split up like this only because there would be an uprising if they lumped it all together, so they split it up and tax you in pieces and chunks (April 15 is only one chunk) so that you think you're paying less, psychologically.

But yeah, 50% is about the right number for that income.

It's 2026 on a self proclaimed big brain forum and people still don't understand basic things like tax brackets... A sight to behold

> 60K per month will pay a 4.5 million dollar mortgage

A mortgage is NOT owning! So many people are poisoned by this propaganda promoted by American society and banks. They prey on the masses by infiltrating the public with this live-on-borrowed-money ideology.

Your 60K/month may end NEXT month and become 0/month if you are subject to the next round of Zuck's layoffs, or you end up stack ranked and PIPed at Amazon due to internal politics. One of these things happen and poof you're in the 0th percentile of income.

In the bay area, if you want a $4.5M home, you need to have $4.5M in cash or liquid assets. Period. Otherwise you're risking a foreclosure disaster if you accidentally say something wrong in a leadership update meeting, or if this AI heyday comes crashing down.

Borrowing money does not mean you own something, and is a very American way of doing things.

Pretty sure lending is common thw world over

You’re playing with words here. Mortgages are considered ownership around the world.

It’s only fair I throw a creative wrench in your idea of ownership then: eminent domain. You can never own something if it can just be taken away even if you are compensated.

> Mortgages are considered ownership around the world.

Only because the people in power have successfully brainwashed everyone into thinking so. I don't care what brainwashed people consider it to be. I only consider it what it actually is.

From first principles, it is objectively not ownership, if the bank has rights on it.

i don't think this is helpful. it is pay towards ownership, whereas rent isn't.

I don't believe in paying "towards" anything. Either you buy it or you don't, in full. Anything else is financially irresponsible, unless you have the collateral but are only preferring not to liqudate.

fair enough, but that's a different argument. and when it comes to a mortgage your alternative option is renting, and the worst case scenario that you can't pay rent or your mortgage is the same.

it's not like a car where you have the option to do without, you can't do without a place to live. i am pro renting, but unlike a car loan i don't see a mortgage less financially responsible because you can almost always just repay the mortgage by selling the house, in other words unlike any other loan mortgage is unlikely to put you into a debt that you can't repay because the house is your collateral. (unless the housing market crashes maybe)

> I don't care

Then don’t worry your pretty little fingers informing us of your uninformed opinion. You get what you give.

You also cowardly avoided my last remark, or just have no idea what that is. Eminent domain says that your government can decide to take something you think you own, thus proving you don’t own it no matter where you put your name on it or how you paid for it.

Never go full crazy.

Reply on news.ycombinator.com