Does Portland 'Cost of Living' account for Income Tax? (college, property tax)

[Barneyman]

I remember when I was living there, my bi-weekly paycheck was being depleted by almost $200 (almost $400 per month)...stung like hell. When I lived there though, I didn't find it terribly expensive. Beaverton/Hillsboro was pretty reasonable and the cost of living wasn't all that bad either. I wil say though, that I would take a 10% sales tax over a 9% income tax any day. Only one problem. The Seattle cost of living is much higher than Portland. Seattle/Bellevue daycase can be over $1000 month compared to $600-$700 in Portland. Rent in Seattle/Bellevue is on average around $1200-$1300 for an apartment compared to $900-$1000 in Portland. In the end, Portland wins out by a small margin in my opinion.

Getting back to your original question, I would say "no": cost of living in Portland does not take into acount the "state income tax".

[rhizohm]

Hey Everyone,

Thanks for the replies. While a few of you obviously live in and have paid taxes in Oregon, I'm not sure where you get the idea that the income tax is effectively around 6% for a living wage income. According to what I've read, the 9% rate applies to everything over $7,750 up to $125,000. Oregon Income Tax Brackets 2012. So if you are making a "living wage" for a single person of $20,000 (see MIT living wage data for Portland Living Wage Calculator - Living Wage Calculation for Portland city, Multnomah County, Oregon), you are going to pay $1592 or 7.9%. Keep in mind that "living wage" is just scraping by with the minimal circumstances for sustainance, it doesn't speak to eating whole foods, living comfortably and having fun or hobbies, raising children, or saving any money for the future. If you make a "living wage" for one adult, one child in Portland at $40,000 you are going to pay $3392 or 8.5%. So that is a pretty high tax rate!

In response to Leisesturm, you are offering more about your own opinions on life than actual data. That's fine-- I obviously agree with you that taxes are not the sole basis of a major life decision like where to live! That would just be silly. The reason that I am considering Portland is because I DO love what it has to intrinsically offer, but that is another discussion.

In my mind, preference for Seattle or Portland is a very close call--each has its strong points and weak points. Seattle offers more ethnic and international diversity and a stronger economy. Portland has true bikeability, is easier to get around in general, has a smaller feeling and has the most reasonable cost of living of the major west coast cities. Seattle has terrible traffic, is very limited in bikeability and is very hard to get around; Portland has a more limited economy and a high income tax rate. We could easily go into a lot more detail about the differences, but that would be a different topic!

I am a Doctor of Acupuncture and Oriental Medicine (have my Masters, just finishing my Doctorate), and if I were soley concerned with finances, I would move back to the midwest where family connections and an emerging but still largely untapped market would make my life easier. But my point is that I love the Northwest and want to stay in one of her two major cities. But East Asian medical practitioners are numerous here and so it is harder to make a living. Many of them in Seattle work other full time jobs just to get a practice going, and many don't end up practicing at all or never become full time because of how hard it is to get started. I'm used to living in poverty as a student, but it isn't my goal to live this way forever!

Thus, cost of living and taxes *does* factor importantly into my decision. If I were making some six figure salary (or even 40k for goodness sake!) I wouldn't care so much about tax rates because I would be able to rely on having a livable, comfortable income. But when you are closer to the living wage or poverty line, making ends meet gets quite a bit tighter and less comfortable! And while there are successful acupuncturists who make good money, many of them also hover around the minimal living wage for a long time!

Point: Portland's cost of living is about 14% lower, but since Oregon's taxes are higher leaving you with almost 9% less income than you'd have in WA, the net difference is only 5%! Not very significant!

[rhizohm]

Not to mention that salaries in general are lower in Portland than Seattle, if you are financially fortunate enough to have a salary. So lower cost of living, but lower incomes too. And lower incomes and higher taxes means people in general have less money to spend on things like Complementary and Alternative Medicine, lowering what price the market can sustain for my services. So the point I want to make is that while I do like many things about Portland intrinsically better than Seattle, finances have to be a realistic part of my choice!

[AndyAMG]

Just taking a look at pay stubs I can tell you I pay 6-7%. 6.7673% last pay period. I live well above the income listed on that MIT site and still only pay 6-7%

The EPA (via the internet) says my car gets 16 MPG CITY and I'm telling you just by measuring gas then tripping the odometer and doing the math. In reality, I'm lucky to break 14MPG ever.

Go ahead and disregard the ACTUAL answer for the advice YOU asked for.

Tell a business owner that 5% savings isn't significant.

Actually, I don't even know why I care. Stay in Seattle.

[UrbanAdventurer]

If you're not a big consumer then WA might be the smarter play. OR penalizes income while WA penalizes consumption. All things being equal, I personally would come out far ahead in WA since I don't tend to buy lots of big ticket items, but that $150 or so sure does disappear from my paycheck twice a month regardless of my spending habits. No other way to describe that than as a bummer. Go to paycheck city website and play around with it. Your income tax burden in Portland is comparable to New York City, whose residents pay federal, state AND city income taxes. (They also get to pay sales tax on top of that, so there still could be worse things than Oregon I suppose.)

[Nell Plotts]

The city of Portland has an income tax???

[PNW-type-gal]

The individual income tax rates listed are nominal, not actual - much like the Federal tax rate for your income bracket, which does not include deductions or adjustments. Granted, there aren't as many deductions and adjustments on the Oregon income tax as there are on the Federal.

I have yet to find a tax estimator (on-line or otherwise) that is anywhere close to being accurate. There are always things left out of not included.

[UrbanAdventurer]

Originally Posted by Nell Plotts

The city of Portland has an income tax???

No. Wouldn't surprise me if it did at some point though.

[EnricoV]

There was a city income tax for a year or two ten years back or so. Can't remember the excuse ... But it's long gone.

[Larry Caldwell]

Originally Posted by rhizohm

Hey Everyone,

Thanks for the replies. While a few of you obviously live in and have paid taxes in Oregon, I'm not sure where you get the idea that the income tax is effectively around 6% for a living wage income. According to what I've read, the 9% rate applies to everything over $7,750 up to $125,000. Oregon Income Tax Brackets 2012. So if you are making a "living wage" for a single person of $20,000 (see MIT living wage data for Portland Living Wage Calculator - Living Wage Calculation for Portland city, Multnomah County, Oregon), you are going to pay $1592 or 7.9%.

That would be the case if you paid income tax on your gross income, but you don't. You only pay income tax on your AGI, which is substantially less. You get all the deductions and adjustments available on your federal form, and you also don't pay state income tax on the first $5000 of your federal taxes.