Taxes and rent are still bigger. For a senior FAANG engineer making $400k a year, CA income taxes are nearly $40k/year, and rent on a house is perhaps another $60k/year (alternatively, ~$100k/year for a mortgage). All other basic needs are a rounding error compared to that, even with a family.
Correct me if I'm wrong, but the biggest CA income tax deduction available to most people is the mortgage interest and property tax deductions. So yes, you can deduct a lot of your state taxes - provided you're spending even more on an expensive home.
And yes, the tax rate is progressive, but the average rate is still around 9% at that income level (~36k). Marginal rate is just over 11%.
My overall point is just that almost all of the cost of living delta in CA is from taxes and housing. Didn't mean to get too deep into the numbers.
That’s just state tax (CA being one of the highest). They’ll have to pay the same
federal rates as everyone else on top of that. I assume the reason for excluding it is that’d stay constant no matter where you live in the US.
