Portland, Ore., may penalize high-income earners more than any other large U.S. city, according to a new report.
Income earners earning $250,000 a year in Portland pay tax 7.5 percent higher than someone earning $100,000 a year. That was the biggest gain in the country, according to an analysis of the 76 largest U.S. cities by consumer-focused financial information provider SmartAsset.
“You could say Portland ‘punishes’ high earners the most,” Jaclyn DeJohn, executive editor of economic analysis at SmartAsset, said in an email.
According to SmartAsset, someone earning $250,000 pays an average of 34% in taxes, almost 5 percentage points more than someone earning $100,000. In Portland, someone earning $250,000 is taxed at 41 percent, while someone earning $100,000 is taxed at nearly 34 percent. That means someone earning $250,000 in Portland would pay over $100,000 in taxes.
the so-called “High earners, not yet rich,” or HENRYs, which have been the subject of conversation for decades, Chosen by Fortune Magazine In 2003, they earned between $250,000 and $500,000 a year, but faced taxes and expenses that made it difficult to accumulate wealth.
Tax and cost of living differences across the U.S. are especially pronounced now, though, as remote and hybrid work offer white-collar workers more options for relocating to their cities Salary further extended.
In more than two dozen cities, including Houston, Tampa and Nashville, a person earning $250,000 may enjoy a lower tax rate than someone earning $100,000 in cities such as Baltimore and Philadelphia.
High taxes in cities like Portland support investments in education, health and human services, public safety and infrastructure — funds that can dwindle in states with lower tax rates.While states like Florida and Texas don’t income taxthey typically make up for lost revenue in other ways, such as higher property or sales taxes.
For residents of expensive cities like New York and San Francisco, whose housing costs and expenses are daunting, a $250,000 salary has purchasing power of only about $83,000 after accounting for taxes and adjusting the remaining amount for local cost of living. In lower-priced Portland, by comparison, a $250,000 salary can buy about $120,000 after taxes and living costs.
For the analysis, SmartAsset used its salary calculator to calculate federal, state, and local taxes for a single taxpayer with an annual salary of $250,000 and no additional withholding. The company then adjusted after-tax figures for local costs of living in 76 of the largest U.S. cities, using data from the Community and Economic Research Council.