The only way you'll end up with a tax bill that large is if you contribute $0 to tax-advantaged retirement accounts. And that's taking into account state taxes, SSI/Medicare. You don't have to believe me, try it out yourself. https://smartasset.com/taxes/california-tax-calculator. Putting in $300k of income for a single person, it gave me $175k take-home pay + $19k in a 401k, which is an effective rate of 35%. Keep in mind, I'm not including the 401k match, which is pretty darned generous at the BigCos. If we assume the max allowed IRS match ($9.5k or thereabouts) the effective rate falls to 32% and this hypothetical person is banking $145k/year after living expenses.
Lots of people (especially young, healthy people) also opt for health plans with HSAs, which give you more deductions.
> a person who somehow has 0 expenses
Where did you get 0 expenses from? GP stated pretty clearly expenses of $45k/year - on the modest side (probably assumes living with a housemate, or not eating out too much). I was going with $60k/year expenses on $195k/year after taxes.
$45k/yr is a little bit more than the mortgage principal and interest on a million dollar house, at today's interest rates assuming a normal 20% down payment. If you rent you a normal apartment you would spend less. If you rent a luxury apartment you'll spend more but you don't need to.
I've lived in Silicon Valley my entire life, except for when I was in college, and I don't think my living expenses ever got close to $45k/yr until I bought a house, which was an entirely optional decision on my part.
I think my overall expenses are less than that and I spend an exorbitant sum on food (almost as much as I spend on rent). I just don't have crazy expensive hobbies.
There are people I know who live in the bay area on less than 45K/yr in wages, so no its not at all absurd.
The only way you'll end up with a tax bill that large is if you contribute $0 to tax-advantaged retirement accounts. And that's taking into account state taxes, SSI/Medicare. You don't have to believe me, try it out yourself. https://smartasset.com/taxes/california-tax-calculator. Putting in $300k of income for a single person, it gave me $175k take-home pay + $19k in a 401k, which is an effective rate of 35%. Keep in mind, I'm not including the 401k match, which is pretty darned generous at the BigCos. If we assume the max allowed IRS match ($9.5k or thereabouts) the effective rate falls to 32% and this hypothetical person is banking $145k/year after living expenses.
Lots of people (especially young, healthy people) also opt for health plans with HSAs, which give you more deductions.
> a person who somehow has 0 expenses
Where did you get 0 expenses from? GP stated pretty clearly expenses of $45k/year - on the modest side (probably assumes living with a housemate, or not eating out too much). I was going with $60k/year expenses on $195k/year after taxes.