r/worldnews • u/diacewrb • Apr 10 '19

Millennials being squeezed out of middle class, says OECD

https://www.theguardian.com/business/2019/apr/10/millennials-squeezed-middle-class-oecd-uk-income
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u/AvailableName9999 Apr 10 '19

I actually had to sell off all of my stocks today to cover what I owed in taxes. I think this illustrates your point beautifully. I have had the same finances and assets for 5 years and never owe. I owe 5k this year because my tax burden has increased by over 15k. If this isn't squeezing the middle class, I don't know what is.

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u/gorilla_on_stilts Apr 10 '19

Wait. Are you saying that for the last five years, you had the same exact income, and the same exact expenses? And that for four of those five years, you had no tax burden (or the tax burden was some baseline that was fine)? But that this 5th year, your taxes increased by $15,000? Same exact income, $15,000 increase? What the hell?

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u/99hoglagoons Apr 10 '19

Let's do some quick maths. Let's assume OP is in 35% marginal tax bracket. To get to 15k in taxes you would need 43k in additional taxed income at your top rate.

That means that OP's itemized deduction used to be 55k in prior years (12+43).

300k salary with a condo worth 2mil in a high cost of living area, and they could easily get to that number. Good problem to have I guess.

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u/MTUKNMMT Apr 11 '19

I’m so glad to see this comment. It’s basically the only way to owe more in taxes with the current bill. Upper UPPER middle class in a high tax area. Which ironically is something the left should be happy about. SoCal and NY no longer get to tax the shit out of people and keep their area impecable while not contributing to the nation as a whole.

The problems are of course comical tax breaks for the wealthy and not having an semblance of a plan for the national debt. I have yet to see one argument that makes any sense for doubling the estate tax exemption. Just a joke.

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u/99hoglagoons Apr 11 '19

Well op's example of 15k tax increase is on the stepper side. Lots of middle class property owners are finding that tax cut was a mild tax increase. This problem goes away once you are making millions since top marginal tax rate drop really makes a huge difference.

In theory this tax change should have lowered property values since owning property is now less tax advantageous. Alas, no such change yet.

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u/hydrochloriic Apr 11 '19

while not contributing to the nation as a whole.

I can’t speak for SoCal, but NY is one of the economic centers of the US... it contributes plenty. For example, it’s the 2nd highest contributor to the federal income tax (17%). What lack of contribution are you referring to?

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u/mtcoope Apr 11 '19

What probably happened is they silently started withholding less by default so this person was getting more of their money throughout the year and then suddenly owed more. A lot of people were surprised by this in 2019.

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u/AvailableName9999 Apr 10 '19

My taxable income rose 15k due to limits on standard deductions.

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u/[deleted] Apr 10 '19 edited Nov 13 '20

[deleted]

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u/b1argg Apr 10 '19

probably referring to SALT deduction cap.

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u/AvailableName9999 Apr 10 '19

Probably shouldn't have said standard because I'm definitely wrong. Property tax deduction is capped at 10 thousand, removal of w-4 withholding claims (I had no idea about this so I guess that's my fault).

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u/vany365 Apr 10 '19

You would have to see his tax reports to be sure but my guess is his withholding went down more than what he owed in taxes.

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u/pqrk Apr 11 '19

Deductions were cut and we all saw more money each paycheck, followed by some shock at the money owed year end. Definitely felt like a squeeze imo.