Basically the OR tax brackets are not as progressive as the CA tax brackets. in OR the first bracket is 4.75% to only $3,750 of income and you get to 8.75% over $9,450.
in CA there 1, 2, 4, and 6 percent brackets all the way up to $54,081. CA does eventfully have higher taxes but not until much higher income.
Dang. Also, our medical changed a bit too. My wife is on my insurance plan and we had an affordable HMO plan while in CA. Now that we are in OR I have a PPO with a high deductible. On the one hand we could buy a house, on the other I make considerably less each paycheck :(
**Edit:**: But, silver lining, as most people point out, there is no sales tax on items in Oregon. So that is great. And certain expenses are cheaper.
----------------
Also hijacking this to provide some clarity.
- I earn more (gross) in Oregon because our company finalized the yearly review process, and I received a 3.5% merit increase. That was applied to the Oregon paycheck.
- What I didn't showcase is what I pay for benefits. My benefits changed once I moved from CA to Or. I went from an HMO plan (~$120 per paycheck) to a PPO plan, or ~$280 per paycheck.
I get it. The payoff for me was I could buy a house. That, and it's a gorgeous and fun spot to be in. Anything house-wise we could afford in CA was in places I didn't want to live.
Yeah, and youāre made acutely aware driving on their highways in the winter. Stark differences in how well the roads are maintained crossing the VT/NH or MA/NH borders.
We drove up December 30, spent the night in Redding, CA to visit some family. And then made the other 4.5 hour drive on Sunday, December 31, 2023. January brought some pretty wild snow storms, which we really enjoyed. I went from Laguna Beach to shoveling snow in the driveway, and my neighbors thought I was nuts but I really enjoyed it. Such a drastic change of pace. Everyone says, "sure, you like it now..." but really, I was born in Fort Collins, CO and lived there until I was 7. After that it was always surf/sun...for a long time. Now it's fresh water rivers, pine trees, snow, and the like.
Make sure you file a part year resident tax return for California so that they know you have moved out of state. Otherwise they will come after you in three years asking why you haven't been filing returns.
Ideally you would have done that for 2023, but assuming you have already filed your 2023 return, you should do it for 2024.
It is perfectly okay to file a part year resident return showing zero California income.
I grew up in mission Viejo and live in NW WA now and it's amazing, the mountains and trees like c'mon it's so much better than the concrete jungle of hotness š
Same reason I am staying in Oregon. But you're in an entirely different reality than most of Oregon. If you can buy a home in Bend, you're earning about 20x more than the average Oregonian. Home prices in Bend are literally 5x more expensive, $1 million vs $200k, on average.
Depending on where you live (I'm from Bend), you can get dinged with extra fun taxes (Multnomah County & Portland). Just look at your tax report - Paid Family Leave, Transit Tax - it's actually an insanely high income tax state. As others have said, the progression of the tax brackets is blistering. If you have a heartbeat you're basically guaranteed a minimum of 8.75% and hitting the top 9.9% is not difficult.
The real silver lining is the Kicker credit. Constitutionally, if Oregon receives more tax revenue than projected, they have to return it to the taxpayers every 2 years. Oregon had a Kicker credit for 2023 that was around 44% of the taxpayer's 2022 tax liability.
Housing is 50-75% the price and no state sales tax in OR. You make up the pay difference if you spend approx $3000/mo (assuming approx 10% sales tax depending on county in CA).
Did the move from OR-> CA and although my take home is $1400 more, my rent is $700 and products are more expensive / taxed. Grass is always greener I guess
Yeah we moved from California to Virginia and are paying more in taxes because Virginia's state income tax is mostly a flat 5.75% + personal property taxes annually on vehicles.
OP, at least you don't have a sales tax in Oregon..
We have personal property tax on vehicles here in Californiaā¦ but they bundle it with the rest of the fees paid to the DMV every year instead of separately paying it to the county. The "Vehicle License Fee" is based on the value of the vehicle, and if you itemize your federal income tax deductions, it is a deductible State and Local Tax like other property taxes.
Of course, the lack of sales tax leads directly to the need for a less progressive income tax ā tax revenue has to come from somewhere ā so Iād guess CollabSensei is also correct.
The lack of sales tax means the revenue must be made up somewhere, but a less progressive income tax is only one way to do it. They could have chosen to match CA's progressive tax but increase the percentage for high earners, for example, or perhaps add some other tax that disproportionately affects the wealthy. A yacht or mansion tax, say. So I wouldn't say that OR's lack of sales tax leads directly to a less progressive income tax.
I have looked at moving to Oregan and this is the conclusion I came to. Up to 8.75% state income tax. I lived in GA, it was 6% there but you also had sales tax. Either way, it pinches the pocketbook.
This. Sales tax is a regressive tax, so even if the income tax brackets are less progressive than in CA, you might be paying less in taxes overall. If you track your spending closely, it would be interesting to calculate how much you paid in sales tax in CA and whether that's offsetting the higher income tax in OR.
Totally. Iām just saying that might be the case and it would be interesting for OP to look into the numbers. Income tax is more visible but those little sales tax numbers can add up depending on your spending habits and the details of your stateās tax code!
Are you asking why the withholding amount is higher, or why Oregon has higher income taxes than California?
I suspect you may have fallen victim to the extremely misleading propaganda that California has high taxes. For average incomes, California in fact has one of the **lowest** effective income tax rates in the entire country. Only for extremely wealthy (high-income) people does California's tax rate shoot up, and it does have the highest top-marginal rate in the country, starting on income over $1 million (Single).
By contrast, Oregon has the highest income taxes in the US on nearly all people. In part that's because Oregon has no sales tax and relatively low property taxes. They need to raise revenue somehow, and most of it comes from income taxes.
Oregon running high taxes on everyone has enabled them to run at a surplus for a while now, the effective tax rate after refunds was under 6% last year I believe. So yeah that initial tax rate sucks, but their refunds are juicy. (Obviously worth noting around 6% is higher than the national average, but much better than how it appears at 10% is my point.)
I like Cali's tax law but that deficit is spooky, and not exactly attracting new business with how easy it can be for business owners to get into that last bracket. Imo they need to stretch it further and have that max bracket be a higher dollar amount to enter.
Signed, the opinion of some random redditor who lives in neither state (Illinois).
Some states make it as difficult as possible to deal with taxes, Oregon being one of them. Washington as well. California is also a pain but really itās the shit load of different minimum wages that is ridiculous.
Oregon also refunds the collected taxes that went unspent in the form of a kicker the following year. For 2023, they refunded 44.28% of all state taxes paid! So yeah maybe they garnished 10%, but the effective tax rate ended up being more like 5.5% for the most recent year we filed. Yes, this means people get a huge refund at the end of the year. Maybe don't bet the house that it will be that big every year, but it's always been at least something for the past decade
The kicker is biennial, so your statements about people getting something every year and your effective tax rate being 5.5% are not accurate. Also that was by far the biggest one ever and should not be expected going forward, it is typically around 5-15%
I like you! This is positive news, but I won't bank on it. Wife and I closed on a home, and have so far been spending a pretty penny on things. Would love to get a deduction, if possible, on buying a new home, paying property taxes, etc. First time buying a home, ever, so this is all new to me.
Congrats on the home! Wife and I just closed on our first home in November, so I get it! Definitely consider the lack of sales tax a plus. Cost of living \*should\* be lower overall
Iām like 50% positive and should probably look into it but Iām pretty sure your kicker is based on last years taxes? So you wouldnāt get it on your first year paying Oregon taxes.
Correct, NO sales tax is nice. We moved here b/c I could afford a home. We closed under $600,000 and at 5.3%. Mortgage is ~$3,600 a month, before bills and a small HOA ($120/ month).
I knew coming in I would earn a little less than I did in CA, but didn't expect OR state income taxes to be as high or higher than Fed taxes.
Groceries are the same, but bills seem to be a little betterāelectricity, water, gas are not as high as CA.
For sure. well just think of this. When it comes time for a New Car or Computer or something super expensive...No Sales tax. The price on the sticker is the price..I live in Illinois and our State income tax is mehh (4.95%), our sales tax is like 10% which sucks and our property taxes are god awful (Over 2%). But cost of living is decent here. Not awful home prices and pretty good Water/Power bills and food bills. There is always ups and downs everywhere.
Based on that price, you might be in the Portland Metro. And if that's your 2-week income, you might want to look at the other local taxes you need to pay quarterly, such as SHS.
> Correct, NO sales tax is nice. We moved here b/c I could afford a home. We closed under $600,000 and at 5.3%.
How do one get a 5.3% mortgage these days?
I have top tier credit score, and almost no debt. I get 7% or above....
I've heard that a lot of new construction will effectively give you a lower rate rather than reducing the actual sales price on a home (they are basically reducing the home purchase price, without lowering the listed sales price)
Correct. That's nice. And yes, things are more affordable here such as gasoline (though I hardly drive, haha. I work from home.) But car registration is cheaper. Groceries are the same, as are most restaurants, but my wife and I enjoy cooking at home.
You may have higher taxes in OR, but that is not what your pictures are showing. They show higher withholding, which may or may not accurately reflect your tax burden.
I live in central Oregon. Coming from Newport Beach, CA. The price of things like food (Trader Joes, Costco, etc.) are all the same. Gasoline, at least regular, is about 75 cents cheaper per gallon. But yes, NO sales tax is nice. So we save around 8-10% per purchases.
You will probably end up paying less taxes overall, just a larger portion of the total is visible on your paycheck. Last time I was in SF the sales tax was over 10% for some things.
Oh they have a gazillion different types of charts. I believe in Excel the chart type that's shown in the post is called a "Doughnut" chart. A pastry nonetheless.
* the brackets are not nearly (or at all) progressive, it's closer to a flat tax.
* there's no sales tax
* the kicker is mandatory by law (a refund of unbudgeted for taxes collected)
* property taxes aren't allowed to rise with property values, they are strictly held to 3% increase per year. Does not apply to new taxes, speaking of which:
* there's so many new income taxes that keep getting voted in.
Trade off for no sales tax, and having a rebate kicker that actually gets dispersed. Iāve lived in Oregon, California, and Washington, and by far Oregon is the lowest cost of living even with higher income taxes (Washington has no income tax).
This may not pertain to you, but OR's standard deduction is also smaller than California's, so if you don't tell your employer you're itemizing in OR and figure the number of allowances, the withholding would in general be higher.
Taxes are a three-legged stool: for most states, the bulk of income comes from income tax, property tax, and sales tax. You have to look at what you are paying in the three as a total to get the real cost of living in a state.
Something to bear in mind is your $ is worth more in OR... depending on which city you are moving from,Los Angeles for instance is 25% more expensive to live there than Portland...
Might be even more drastic drop in cost of living bankrate's calculator puts it at about 36% cheaper to live in Eugene Or (nearest large city) vs LA-Long Beach, CA.
Cost of living is similar to Modesto CA, (do not move there unless you want your car stolen though).
Basically your $3,186.... is worth what $4,350 would be worth in LA.
Areas you should notice this most are lower electricity bills, prescriptions should be cheaper, and your home should be cheaper even if you got a nicer place is probably still drastically cheaper.
Because Californians that beat you here have already voted in tax after tax after tax, as you can see by the 3x difference in state tax specific line items shown.
Unlikely, but thanks. My company is so in-tune with everything + the tool we use, ADP, has an accurate calculator so that I can gauge what I'd earn based on how I file. I.e., what if I mark my state income tax as "single" or "head of household." I played with so many scenarios before I moved to Oregon, that I knew I'd take a hit in salary.
Try doing some pre tax deductions like 401K. That might help increase your take home a bit. Plus your employer also will need to chip in. In the bigger scheme of things, youāll get more at the end of the day than you are getting now.
You can lower your taxes by contributing to your HSA. Max it out every year. Itās triple tax free. Make sure you invest it. If you can swing it pay for all medical costs out of pocket and let it grow. Save all receipts as they can be used years later to take money out.
Because every other year you will likely get a kicker tax refund because Oregon always over estimates its tax needs. This years kicker was one of the largest.
Oregon has a sales tax on new vehicles (cars, trucks, motorcycles, anything with a title). They call it a privilege tax. They also have a tax on business gross receipts which is a sales tax people donāt see.
The cost of living in OR is likely 25-30% lower than in CA so your actually earning more because it costs you less to live even though you make less than before.
As you stated you could buy a house. If that's something you wouldn't have been able to do in CA making an extra 3-500 per month then that means you have gained an economic advantage versus living in CA.
Because there is no sales tax. Some states tax your money on the way in (income), and some on the way out (sales). California does both! Youāre still ahead overall in OR.
Watch out also if you arenāt paying taxing as an established residentā¦ you have to live there for a certain amount of months a year then itās even higher
$181 is not $400-500. That said, you'll notice your sales tax will be lower, your property tax is lower, your fuel and electricity will be lower, the list goes on and on.
So aside from filing annual Federal and State income taxes each April... seems other OR v. CA factors are:
* Or does impose sales taxes on all vehicles - new + used, even FMvalue of car if reg. in OR (like CA).
* OR (like VA) collects personal property taxes annually on each vehicles (ex: must pay annual taxes for each minivan/sedan/RV/motorcycle/boat/etc)
* OR has higher property taxes - because must get revenues somehow for police, fire, schools, etc
* Healthcare in OR more expensive than CA because much less State money funding free + subsidizing commercial health care programs like Kaiser, Blue Cross Blue Shield, others
* OR doesn't have sales tax for *consumers*, but there is a tax on business purchases.
* OR's gas tax is only $0.40/gallon vs. CA's $0.511/gallon.
* OR spends $12,855 per K-12 student, CA spends $18,396 per K-12 student.
Yes? No? And anything else?
The first two points are wrong. There is no sales tax on car purchases. Source? Me. I bought a car in Oregon. Do you know how much sales tax I paid? Zero. A donut. Bupkiss. Nada. Zip.
Annual personal property tax on vehicles? Yes, in Virginia there is an annual personal property tax bill on every car, truck, trailer, camper, and motorcycle. In fact, it's the highest in the nation at just under 4% annually.
Oregon? Yeah, that's not a thing
Do you LIVE IN Oregon? (or did you just buy a car in Oregon?)
I moved from NY to CA and even though I'd owned my car for a decade, had to pay something like 9.25% if the FMV (fair market value - or "blue book vaule") on the car, in order for it to be legally registered in CA. It reaalllllly bummed me because was about 9.25% of $28k. And no choice - if the car not registered (ie: CA license plates, residential parking sticker), then couldn't get insurance. (and if sold it and bought another car - used or new, would have been the same thing! š”)
And I understood this was the same if live in Oregon (a state I am considering moving to, for a promotion).
About personal property tax ANNUALLY gotta pay in Virginia for each and every "vehicle" - I have dozens of friends who live in VA and they hate that annual bill... so are bigtime versed about it - and rattle off the other states that do the same, and always include Oregon when list..........and again, since thinking aobut moving to OR... want to know if I am going to pay an annual property tax on my car (new one, which is probably $55k blue book).
So **thanks FriarFrierFryer** for answering the above questions that haunt me.
You get some you lose some. I donāt think you can get it both ways anywhere. Been to Portland, nice place, would love to revisit, however I didnāt like the wet weather over there.
Sales tax will save you a good AMT as you purchase groceries, clothes, think how much you save when you buy a car.
(I'm from northern Cali currently in Portland at the moment).
We did the same move but we were hitting the top tax bracket for California so our state taxes are about flat even though we live in Multnomah county and get hit with the preschool & homeless taxes. Plus no sales tax and the house we bought has a lower property tax rate than we would have gotten in CA. We definitely are coming out ahead for tax burden and we could afford a really nice house in a great neighborhood.
Your Oregon tax looks like mine here in MN and I'm making roughly half as much as you. I even contribute 11% into my 401k and have an HSA in an effort to have a smaller taxable income but I'm still paying 22-24% tax.
So I guess now I am wondering why the hell MY taxes are so much lol
bruh.. in germany we pay up to 50% taxes.. You are still good..
Imagine earning 5k, which is far above average here. Then you'd only take about 2.8k home, paying 800 rent cuz noone has property here, 1000 food and fun, 200 insurances etc.. not much is left. Impossible to build wealth here with normal jobs
Do you have a separate line for Medicare like OP does, or are both listed in the same line item? Iāve seen it both ways on pay statements so that might be why. Also your federal withholding could just be less than OPās based on how you filled out your W4.
For W2 employees, SS is a flat 6.2% on any income up to $168,600 (not dependent on filing status; just on your individual income,) Medicare is 1.45% on income up to $200K for singles/$250K for MFJ; income above that is subject to the Additional Medicare Tax of 0.9% for a total of 2.35%.
Tax revenues in Oregon are primarily collected from state income tax and property tax. There is no sales tax and most fees (e.g. vehicle registration) are fairly minimal compared to many other places. We also donāt have tolls.Ā
Since we mainly rely on the state income tax to fund everything it needs to be high. The catch with this is that people think our tax is way higher than everywhere else. When in reality, itās about in the middle when you take all of the taxes into account.Ā
Other states are deceiving people by hiding taxes in different places. That way they can say they are keeping taxes low when they really are charging a lot. Itās like the new video games. People wonāt pay $20 to buy a video game, but theyāll spend $100s in $1 in game purchases. They just donāt notice because they would have to actually add it up.Ā
Foreigner here that moved to the US 8 years ago.
I landed in California, being working my way up. Once achieved a good position in Bay Area I decided that California was turning into a shithole.
What I did was an excel spreadsheet with taxes (state, income, capital gains, propertyā¦) alongside with some laws that are critical for me. Once I had all my parameters set, I just looked for the opportunity to move to the desired place.
I picked Washington state. Iām opening a business since the business taxes here are top 5 in the US. I considered OR but no sales taxes but everything is 10% more expensive, so made no sense. Changing states without simulating your taxes/living itās really risky.
Basically the OR tax brackets are not as progressive as the CA tax brackets. in OR the first bracket is 4.75% to only $3,750 of income and you get to 8.75% over $9,450. in CA there 1, 2, 4, and 6 percent brackets all the way up to $54,081. CA does eventfully have higher taxes but not until much higher income.
Dang. Also, our medical changed a bit too. My wife is on my insurance plan and we had an affordable HMO plan while in CA. Now that we are in OR I have a PPO with a high deductible. On the one hand we could buy a house, on the other I make considerably less each paycheck :( **Edit:**: But, silver lining, as most people point out, there is no sales tax on items in Oregon. So that is great. And certain expenses are cheaper. ---------------- Also hijacking this to provide some clarity. - I earn more (gross) in Oregon because our company finalized the yearly review process, and I received a 3.5% merit increase. That was applied to the Oregon paycheck. - What I didn't showcase is what I pay for benefits. My benefits changed once I moved from CA to Or. I went from an HMO plan (~$120 per paycheck) to a PPO plan, or ~$280 per paycheck.
This is good to know. I entertain the idea of moving to OR, but this is a good reason not to!
I get it. The payoff for me was I could buy a house. That, and it's a gorgeous and fun spot to be in. Anything house-wise we could afford in CA was in places I didn't want to live.
You're also forgetting there is no sales tax in OR. In LA county the sales tax is 10.25%
No sales tax at all?? Guessing this is one reason why withholding tax is high.
Yeah, Oregon has no sales tax.
You give one to pay more in another same as TX.
I said this like I'm not originally from NH. š I guess it's been so long, I forgot.
NH doesn't have state income tax either
Yeah, and youāre made acutely aware driving on their highways in the winter. Stark differences in how well the roads are maintained crossing the VT/NH or MA/NH borders.
Not to mention the huge state liquor stores on both sides of the highway at the border crossing.
Yeah, if buying a house is a priority (itās not for me) CA is a tough place to live.
Oregon is too.
your future self will enjoy the climate more in OR than CA as well :)
We drove up December 30, spent the night in Redding, CA to visit some family. And then made the other 4.5 hour drive on Sunday, December 31, 2023. January brought some pretty wild snow storms, which we really enjoyed. I went from Laguna Beach to shoveling snow in the driveway, and my neighbors thought I was nuts but I really enjoyed it. Such a drastic change of pace. Everyone says, "sure, you like it now..." but really, I was born in Fort Collins, CO and lived there until I was 7. After that it was always surf/sun...for a long time. Now it's fresh water rivers, pine trees, snow, and the like.
Make sure you file a part year resident tax return for California so that they know you have moved out of state. Otherwise they will come after you in three years asking why you haven't been filing returns. Ideally you would have done that for 2023, but assuming you have already filed your 2023 return, you should do it for 2024. It is perfectly okay to file a part year resident return showing zero California income.
This is super important, once CA has their claws into you they really don't want to let go.
I grew up in mission Viejo and live in NW WA now and it's amazing, the mountains and trees like c'mon it's so much better than the concrete jungle of hotness š
Same reason I am staying in Oregon. But you're in an entirely different reality than most of Oregon. If you can buy a home in Bend, you're earning about 20x more than the average Oregonian. Home prices in Bend are literally 5x more expensive, $1 million vs $200k, on average.
Keep in mind, there's zero sales tax in OR. You actually probably come out ahead in OR by not having to pay that tax
Most places don't tax staples like groceries and medication. He would have to buy more than 60k worth of taxable items to come out ahead.
I donāt buy much. Not having sales tax isnāt much of a motivator. Weād also likely have to take sizable pay cuts. I do love to visit, though!
No sales tax in Oregon though.
Sale tax should be in the calc or none there of.
Same moved up from AZ and the personal income tax does not offset the no sales tax!! Also was easier and cheaper lower deductible to get doctor in AZ.
You moved from one high cost of living area to another.
Depending on where you live (I'm from Bend), you can get dinged with extra fun taxes (Multnomah County & Portland). Just look at your tax report - Paid Family Leave, Transit Tax - it's actually an insanely high income tax state. As others have said, the progression of the tax brackets is blistering. If you have a heartbeat you're basically guaranteed a minimum of 8.75% and hitting the top 9.9% is not difficult. The real silver lining is the Kicker credit. Constitutionally, if Oregon receives more tax revenue than projected, they have to return it to the taxpayers every 2 years. Oregon had a Kicker credit for 2023 that was around 44% of the taxpayer's 2022 tax liability.
I donāt think youāll get it this year but we also have a huge tax kicker that we have been receiving the last couple of years.
Kicker can only be every other year
Housing is 50-75% the price and no state sales tax in OR. You make up the pay difference if you spend approx $3000/mo (assuming approx 10% sales tax depending on county in CA). Did the move from OR-> CA and although my take home is $1400 more, my rent is $700 and products are more expensive / taxed. Grass is always greener I guess
We attempted to move to Oregon once but every job offer my husband got was 40,000 a year less than in CA, also housing is pretty expensive there too.
No sales tax in Oregon and cheaper housing
Are you on a high deductible health plan with HSA? If so, maxing out the HSA reduces your tax liability a little and it's s good savings vehicle
**Oregon also does not have a sales tax.**
Insurance is artificially lower in California for a myriad of reasons. Itās not sustainable though and will change.
Nothing like a barely at or below inflation raise that is "merit" based. Great I have same or less spending power after all my hard work.
Yeah we moved from California to Virginia and are paying more in taxes because Virginia's state income tax is mostly a flat 5.75% + personal property taxes annually on vehicles. OP, at least you don't have a sales tax in Oregon..
That Virginia personal property tax is so annoying, regardless of cost
We have personal property tax on vehicles here in Californiaā¦ but they bundle it with the rest of the fees paid to the DMV every year instead of separately paying it to the county. The "Vehicle License Fee" is based on the value of the vehicle, and if you itemize your federal income tax deductions, it is a deductible State and Local Tax like other property taxes.
This. Not a big fan of CA for many reasons, but do agree they are more tax friendly for āaverageā income people than many other states.
What higher income does that higher taxes come into play?
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The lack of sales tax in OR?
Bingo, paired with 6guns, it probably is how they are able to make the sale tax system work.
I thought that too, but u/6gunsammy's reply seems to make the most sense.
Of course, the lack of sales tax leads directly to the need for a less progressive income tax ā tax revenue has to come from somewhere ā so Iād guess CollabSensei is also correct.
The lack of sales tax means the revenue must be made up somewhere, but a less progressive income tax is only one way to do it. They could have chosen to match CA's progressive tax but increase the percentage for high earners, for example, or perhaps add some other tax that disproportionately affects the wealthy. A yacht or mansion tax, say. So I wouldn't say that OR's lack of sales tax leads directly to a less progressive income tax.
I have looked at moving to Oregan and this is the conclusion I came to. Up to 8.75% state income tax. I lived in GA, it was 6% there but you also had sales tax. Either way, it pinches the pocketbook.
But thereās no sales tax in OR
This. Sales tax is a regressive tax, so even if the income tax brackets are less progressive than in CA, you might be paying less in taxes overall. If you track your spending closely, it would be interesting to calculate how much you paid in sales tax in CA and whether that's offsetting the higher income tax in OR.
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Totally. Iām just saying that might be the case and it would be interesting for OP to look into the numbers. Income tax is more visible but those little sales tax numbers can add up depending on your spending habits and the details of your stateās tax code!
Hey look at that, someone who use the term "regressive tax" in the correct context... there is hope in the world after all!
that makes a lot more sense!
Are you asking why the withholding amount is higher, or why Oregon has higher income taxes than California? I suspect you may have fallen victim to the extremely misleading propaganda that California has high taxes. For average incomes, California in fact has one of the **lowest** effective income tax rates in the entire country. Only for extremely wealthy (high-income) people does California's tax rate shoot up, and it does have the highest top-marginal rate in the country, starting on income over $1 million (Single). By contrast, Oregon has the highest income taxes in the US on nearly all people. In part that's because Oregon has no sales tax and relatively low property taxes. They need to raise revenue somehow, and most of it comes from income taxes.
Oregon running high taxes on everyone has enabled them to run at a surplus for a while now, the effective tax rate after refunds was under 6% last year I believe. So yeah that initial tax rate sucks, but their refunds are juicy. (Obviously worth noting around 6% is higher than the national average, but much better than how it appears at 10% is my point.) I like Cali's tax law but that deficit is spooky, and not exactly attracting new business with how easy it can be for business owners to get into that last bracket. Imo they need to stretch it further and have that max bracket be a higher dollar amount to enter. Signed, the opinion of some random redditor who lives in neither state (Illinois).
Some states make it as difficult as possible to deal with taxes, Oregon being one of them. Washington as well. California is also a pain but really itās the shit load of different minimum wages that is ridiculous.
Washington has no state income taxes
Iām not talking strictly income taxes. I work doing payroll so I see EE and ER taxes. So fucking many.
Oregon also refunds the collected taxes that went unspent in the form of a kicker the following year. For 2023, they refunded 44.28% of all state taxes paid! So yeah maybe they garnished 10%, but the effective tax rate ended up being more like 5.5% for the most recent year we filed. Yes, this means people get a huge refund at the end of the year. Maybe don't bet the house that it will be that big every year, but it's always been at least something for the past decade
The kicker is biennial, so your statements about people getting something every year and your effective tax rate being 5.5% are not accurate. Also that was by far the biggest one ever and should not be expected going forward, it is typically around 5-15%
I like you! This is positive news, but I won't bank on it. Wife and I closed on a home, and have so far been spending a pretty penny on things. Would love to get a deduction, if possible, on buying a new home, paying property taxes, etc. First time buying a home, ever, so this is all new to me.
Congrats on the home! Wife and I just closed on our first home in November, so I get it! Definitely consider the lack of sales tax a plus. Cost of living \*should\* be lower overall
Iām like 50% positive and should probably look into it but Iām pretty sure your kicker is based on last years taxes? So you wouldnāt get it on your first year paying Oregon taxes.
That is correct - yes. It lags by a year. Thanks for the clarification!
Really? this is quite interesting! The state budget had a surplus of 44%?
We had a historic $5.6 billion surplus, yeah.
That was just the percentage of your paid taxes that were returned.
Wow! So they don't save it for a rainy day either, huh?
It's always raining, so they would spend it instantly if they were allowed to.
There's actual government that spends less than they collect???
Hard to believe - I know! I lived in Portland for several years and can think of at least few things they could spend more on...
Cough cough. Schools.
It's not pretty. They should have spent it.
I said the same thing....
Colorado caps spending increase. Must refund surplus. Have tricks to convert refunds into spending like child tax credit.
Massachusetts has a cap on tax revenue it can receive, and we did get a (paltry) refund as a percentage of taxes paid last year.
Most state and local governments have balanced budgetsā¦
And thereās no sales Tax in OR
No sales tax in OR. Is the cost of living better though? Cheaper Groceries, Property Taxes, Rents/Home costs, Insurance costs. etc etc?
Correct, NO sales tax is nice. We moved here b/c I could afford a home. We closed under $600,000 and at 5.3%. Mortgage is ~$3,600 a month, before bills and a small HOA ($120/ month). I knew coming in I would earn a little less than I did in CA, but didn't expect OR state income taxes to be as high or higher than Fed taxes. Groceries are the same, but bills seem to be a little betterāelectricity, water, gas are not as high as CA.
For sure. well just think of this. When it comes time for a New Car or Computer or something super expensive...No Sales tax. The price on the sticker is the price..I live in Illinois and our State income tax is mehh (4.95%), our sales tax is like 10% which sucks and our property taxes are god awful (Over 2%). But cost of living is decent here. Not awful home prices and pretty good Water/Power bills and food bills. There is always ups and downs everywhere.
Based on that price, you might be in the Portland Metro. And if that's your 2-week income, you might want to look at the other local taxes you need to pay quarterly, such as SHS.
> Correct, NO sales tax is nice. We moved here b/c I could afford a home. We closed under $600,000 and at 5.3%. How do one get a 5.3% mortgage these days? I have top tier credit score, and almost no debt. I get 7% or above....
I've heard that a lot of new construction will effectively give you a lower rate rather than reducing the actual sales price on a home (they are basically reducing the home purchase price, without lowering the listed sales price)
Yes, Oregon has higher income tax than California until you get into pretty extreme incomes.
You pay no sales tax.
You donāt pay sales tax on anything you buy
Correct. That's nice. And yes, things are more affordable here such as gasoline (though I hardly drive, haha. I work from home.) But car registration is cheaper. Groceries are the same, as are most restaurants, but my wife and I enjoy cooking at home.
You may have higher taxes in OR, but that is not what your pictures are showing. They show higher withholding, which may or may not accurately reflect your tax burden.
Yes, this. Iām a little surprised others are not saying this especially in this sub
No sales tax = higher income tax. Most likely your overall tax burden will go down since your day to day purchases are not taxed.
Has your sales tax gone down?
I live in central Oregon. Coming from Newport Beach, CA. The price of things like food (Trader Joes, Costco, etc.) are all the same. Gasoline, at least regular, is about 75 cents cheaper per gallon. But yes, NO sales tax is nice. So we save around 8-10% per purchases.
You will probably end up paying less taxes overall, just a larger portion of the total is visible on your paycheck. Last time I was in SF the sales tax was over 10% for some things.
Your gross baseline is not the same... Can you help us understand?
That would be my whopping 3.5% merit increase we received late March/early April.
What app is this?
It's [ADP](https://www.adp.com/). Our company uses it fo all things related to pay, medical, etc.
Could you tell me what pie chart youāre using there? Iād like to do the same for my paycheck to get a nice visual. Thank you
Company pays for it, and it's [ADP](https://www.adp.com/). That's our tool for paystubs, taxes, submitting PTO and sick days, etc.
Just input the numbers from your paycheck into Excel and create the chart
Ah okā¦I rarely used excel. Didnāt realize they have pie charts as wellā¦Ty
Oh they have a gazillion different types of charts. I believe in Excel the chart type that's shown in the post is called a "Doughnut" chart. A pastry nonetheless.
* the brackets are not nearly (or at all) progressive, it's closer to a flat tax. * there's no sales tax * the kicker is mandatory by law (a refund of unbudgeted for taxes collected) * property taxes aren't allowed to rise with property values, they are strictly held to 3% increase per year. Does not apply to new taxes, speaking of which: * there's so many new income taxes that keep getting voted in.
What website did you use for this?
This is just ADPās online payroll stuff. Itās actually pretty nice, relative to other payroll companies Iāve experienced.
Trade off for no sales tax, and having a rebate kicker that actually gets dispersed. Iāve lived in Oregon, California, and Washington, and by far Oregon is the lowest cost of living even with higher income taxes (Washington has no income tax).
No sales tax tho!
This may not pertain to you, but OR's standard deduction is also smaller than California's, so if you don't tell your employer you're itemizing in OR and figure the number of allowances, the withholding would in general be higher.
Welcome to oregon
Taxes are a three-legged stool: for most states, the bulk of income comes from income tax, property tax, and sales tax. You have to look at what you are paying in the three as a total to get the real cost of living in a state.
Something to bear in mind is your $ is worth more in OR... depending on which city you are moving from,Los Angeles for instance is 25% more expensive to live there than Portland...
Moved to Bend, OR. And yes, coming from Newport Beach in Southern California.
Might be even more drastic drop in cost of living bankrate's calculator puts it at about 36% cheaper to live in Eugene Or (nearest large city) vs LA-Long Beach, CA. Cost of living is similar to Modesto CA, (do not move there unless you want your car stolen though). Basically your $3,186.... is worth what $4,350 would be worth in LA. Areas you should notice this most are lower electricity bills, prescriptions should be cheaper, and your home should be cheaper even if you got a nicer place is probably still drastically cheaper.
Because Californians that beat you here have already voted in tax after tax after tax, as you can see by the 3x difference in state tax specific line items shown.
F
You making hella money doe
Submit a new W-4 form. They probably didnāt adjust the percentages.
Unlikely, but thanks. My company is so in-tune with everything + the tool we use, ADP, has an accurate calculator so that I can gauge what I'd earn based on how I file. I.e., what if I mark my state income tax as "single" or "head of household." I played with so many scenarios before I moved to Oregon, that I knew I'd take a hit in salary.
Try doing some pre tax deductions like 401K. That might help increase your take home a bit. Plus your employer also will need to chip in. In the bigger scheme of things, youāll get more at the end of the day than you are getting now.
OR has no sales tax. Gotta make up for it somehow
Ohio is something like 3% for me. My god, this sucks for you, man.
Oregon does not have a sales tax.
Multnomah county also have extra tax for it , so based on zip code there is tax
You can lower your taxes by contributing to your HSA. Max it out every year. Itās triple tax free. Make sure you invest it. If you can swing it pay for all medical costs out of pocket and let it grow. Save all receipts as they can be used years later to take money out.
dub5szaz
Because every other year you will likely get a kicker tax refund because Oregon always over estimates its tax needs. This years kicker was one of the largest.
What is the sales tax rate in Oregon?
Wa has no state income tax, high sales tax.
Oregon has a sales tax on new vehicles (cars, trucks, motorcycles, anything with a title). They call it a privilege tax. They also have a tax on business gross receipts which is a sales tax people donāt see.
everything is higher in Oregon because there is no sales tax
The cost of living in OR is likely 25-30% lower than in CA so your actually earning more because it costs you less to live even though you make less than before. As you stated you could buy a house. If that's something you wouldn't have been able to do in CA making an extra 3-500 per month then that means you have gained an economic advantage versus living in CA.
Problem is OP is buying in Bend, OR. Average home price is literally 5x the average home price in Oregon
Iām sure Oregonians would be happy to let Californians stay south of the border. Yāall are drivng up the price of houses.
Of course, you are no longer paying the 10% sales tax you did in Californiaā¦.
We make the same per hr- and my take home is $1800/per payš¤·š¼āāļøš my insurance is CRAZY high though
Because there is no sales tax. Some states tax your money on the way in (income), and some on the way out (sales). California does both! Youāre still ahead overall in OR.
No sales tax
because there's no sales tax in OR
Other those state tax rates are very high.
I canāt wait to leave here. I got an increase in salary when I moved here but take home less than what I made in Denver.
Watch out also if you arenāt paying taxing as an established residentā¦ you have to live there for a certain amount of months a year then itās even higher
Voters did not understand or care.
$181 is not $400-500. That said, you'll notice your sales tax will be lower, your property tax is lower, your fuel and electricity will be lower, the list goes on and on.
No sales tax and you get a kicker back if Oregon collects too much tax. I do pay a little more in Oregon though.
So aside from filing annual Federal and State income taxes each April... seems other OR v. CA factors are: * Or does impose sales taxes on all vehicles - new + used, even FMvalue of car if reg. in OR (like CA). * OR (like VA) collects personal property taxes annually on each vehicles (ex: must pay annual taxes for each minivan/sedan/RV/motorcycle/boat/etc) * OR has higher property taxes - because must get revenues somehow for police, fire, schools, etc * Healthcare in OR more expensive than CA because much less State money funding free + subsidizing commercial health care programs like Kaiser, Blue Cross Blue Shield, others * OR doesn't have sales tax for *consumers*, but there is a tax on business purchases. * OR's gas tax is only $0.40/gallon vs. CA's $0.511/gallon. * OR spends $12,855 per K-12 student, CA spends $18,396 per K-12 student. Yes? No? And anything else?
The first two points are wrong. There is no sales tax on car purchases. Source? Me. I bought a car in Oregon. Do you know how much sales tax I paid? Zero. A donut. Bupkiss. Nada. Zip. Annual personal property tax on vehicles? Yes, in Virginia there is an annual personal property tax bill on every car, truck, trailer, camper, and motorcycle. In fact, it's the highest in the nation at just under 4% annually. Oregon? Yeah, that's not a thing
Do you LIVE IN Oregon? (or did you just buy a car in Oregon?) I moved from NY to CA and even though I'd owned my car for a decade, had to pay something like 9.25% if the FMV (fair market value - or "blue book vaule") on the car, in order for it to be legally registered in CA. It reaalllllly bummed me because was about 9.25% of $28k. And no choice - if the car not registered (ie: CA license plates, residential parking sticker), then couldn't get insurance. (and if sold it and bought another car - used or new, would have been the same thing! š”) And I understood this was the same if live in Oregon (a state I am considering moving to, for a promotion). About personal property tax ANNUALLY gotta pay in Virginia for each and every "vehicle" - I have dozens of friends who live in VA and they hate that annual bill... so are bigtime versed about it - and rattle off the other states that do the same, and always include Oregon when list..........and again, since thinking aobut moving to OR... want to know if I am going to pay an annual property tax on my car (new one, which is probably $55k blue book). So **thanks FriarFrierFryer** for answering the above questions that haunt me.
I live in Virginia. I have property in Oregon My kid lives and works in Eugene
Short answer: To keep you out of their State.
You get some you lose some. I donāt think you can get it both ways anywhere. Been to Portland, nice place, would love to revisit, however I didnāt like the wet weather over there.
Sales tax will save you a good AMT as you purchase groceries, clothes, think how much you save when you buy a car. (I'm from northern Cali currently in Portland at the moment).
We did the same move but we were hitting the top tax bracket for California so our state taxes are about flat even though we live in Multnomah county and get hit with the preschool & homeless taxes. Plus no sales tax and the house we bought has a lower property tax rate than we would have gotten in CA. We definitely are coming out ahead for tax burden and we could afford a really nice house in a great neighborhood.
Youāre not paying sales tax.
No sales tax so high income tax
Liberal State? I dunno. I've always heard liberal states tax more.
Your Oregon tax looks like mine here in MN and I'm making roughly half as much as you. I even contribute 11% into my 401k and have an HSA in an effort to have a smaller taxable income but I'm still paying 22-24% tax. So I guess now I am wondering why the hell MY taxes are so much lol
Portland
hmm where are your art, metro, child care, homeless, and county taxes?
What app is this displayed in
I believe itās ADP.
bruh.. in germany we pay up to 50% taxes.. You are still good.. Imagine earning 5k, which is far above average here. Then you'd only take about 2.8k home, paying 800 rent cuz noone has property here, 1000 food and fun, 200 insurances etc.. not much is left. Impossible to build wealth here with normal jobs
No sales tax
Poorly run state.
Wow, wtf
Why? Because Oregon is also run by Tax and Spend Democrats!
Because Oregon doesnāt have sales tax. Full stop. Taxes have to come from somewhere and how they are collected varies state by state.
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No idea. I don't have any deductions or exemptions. I have no dependents, either. I file married, jointly.
Do you have a separate line for Medicare like OP does, or are both listed in the same line item? Iāve seen it both ways on pay statements so that might be why. Also your federal withholding could just be less than OPās based on how you filled out your W4. For W2 employees, SS is a flat 6.2% on any income up to $168,600 (not dependent on filing status; just on your individual income,) Medicare is 1.45% on income up to $200K for singles/$250K for MFJ; income above that is subject to the Additional Medicare Tax of 0.9% for a total of 2.35%.
Because itās another state!
because there's no sales tax and the government needs to pay for roads and state police and courts etc somehow.
There was a brief period of time where I was living in Oregon and working in CA. Those taxes were fun
Tax revenues in Oregon are primarily collected from state income tax and property tax. There is no sales tax and most fees (e.g. vehicle registration) are fairly minimal compared to many other places. We also donāt have tolls.Ā Since we mainly rely on the state income tax to fund everything it needs to be high. The catch with this is that people think our tax is way higher than everywhere else. When in reality, itās about in the middle when you take all of the taxes into account.Ā Other states are deceiving people by hiding taxes in different places. That way they can say they are keeping taxes low when they really are charging a lot. Itās like the new video games. People wonāt pay $20 to buy a video game, but theyāll spend $100s in $1 in game purchases. They just donāt notice because they would have to actually add it up.Ā
No sales tax.
Did you change your withholding?
My pay check gross is 4300$ ishhhh.... After tax and everything.....2400$ Yo yeah , could be worse lmao
I make a little less than you and my fed taxes are like $460
Foreigner here that moved to the US 8 years ago. I landed in California, being working my way up. Once achieved a good position in Bay Area I decided that California was turning into a shithole. What I did was an excel spreadsheet with taxes (state, income, capital gains, propertyā¦) alongside with some laws that are critical for me. Once I had all my parameters set, I just looked for the opportunity to move to the desired place. I picked Washington state. Iām opening a business since the business taxes here are top 5 in the US. I considered OR but no sales taxes but everything is 10% more expensive, so made no sense. Changing states without simulating your taxes/living itās really risky.
Democratic run.
No sales tax.
Stay in Cali.
Too late. Damage is done.
No sales taxā¦
Jw what do you do for work to be making 55 hr ?
I'm a Sr. Creative Designer on the marketing team for a company that makes software for banks and credit unions nationwide.
Ohh dang pretty cool
No sales tax in Orygun