Depressing new study finds $100K translates to just $66K in major CA cities

A depressing new study has found a $100,000 salary after taxes translates to less than $66,000 a year in major California cities due to high taxes and the staggering cost of living.

Research by Consumer Affairs found a six-figure income in the Golden State “no longer guarantees that you can live comfortably” in eight metropolises.

The list includes two Bay Area cities and five Southern California ones that tied for 4th place when the tax rates of America’s 100 largest cities were analyzed.

1. San Francisco
2. Oakland
3. New York City
4. Five SoCal cities tied for 4th*
   • Irvine, Anaheim, Santa Ana, Long Beach, Los Angeles
5. Honolulu, Hawaii
6. San Jose

“In all of those cities, a $100,000 salary translates to less than $66,000 in adjusted post-tax purchasing power — more than $20,000 less than in cities where purchasing power is highest,” ConsumerAffairs researchers said.

In some places, the research found that a hundred grand a year can be “just enough for survival mode.”

“Even if you do arrive at that $100,000 salary, it doesn’t all make it to your net paycheck,” researchers said.

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“Take-home pay varies dramatically by location, in part due to the wide variance in state and local tax rates across the United States.”

Researchers added, “But taxes are only part of the equation; housing and everyday costs can erode take-home pay just as quickly.”

Not coincidentally, many of these cities also happen to also be on the Consumer Affairs’ list of most expensive places to live in America.

“In some cities, high costs of living and taxes can shrink a six-figure salary to feel more like peanuts. Combined, these costs can leave a stark contrast between a resident’s gross pay and their actual purchasing power,” researchers said. 

It added, “Most cities have low or minimal local taxes; only one city in the bottom 10 faces the double whammy of both state and local taxes — New York — [while] the other nine cities have relatively high state taxes but no local income tax.”

Wondering where $100K will stretch the furthest? The city of Laredo, Texas, topped the list in the US where that six-figure salary take-home pay shrinks to just under $90K, thanks to no local or state taxes and an affordable cost of living.