US News & World Report: Des Moines Richest City in US (Ely: income, property taxes)

[pepe1]

Originally Posted by GraniteStater

The dichotomy would be very low housing prices which make up a sizable chunk of COL, but taxes which are middle of the road at best.

I agree. Many publications seems to zero in on 'low housing prices' when it comes to Des Moines and fail to really look at the whole picture. Property taxes in the Des Moines area are outrageous. My property tax bill is easily double what I paid when I lived in Minnesota.

So we pay a little less for our housing upfront in Des Moines, but get the bee-geezus taxed out of us on the property tax bill. Net effect: Total housing cost is about the same as anywhere else.

[Chicago60614]

Originally Posted by DirtMagurt

Also is this news? I was always of the understanding that Iowa has had the lowest relative COL for years, maybe decades. Had that changed recently?

Iowa's never had the LOWEST cost of living. It's below the national average, but normally ranks right around the 15th lowest cost of living of the 50 states. Southern and Midwestern states are lower. The issue here is that Des Moines has that low cost of living, but at the same time the people there have a higher than average level of pay. Normally those two items trend together. Des Moines is more unique because they pay you more, but things cost less.

People always say, well you get paid $50,000 in NYC, but you can buy the same amount of things as someone who only makes $40,000 in Oklahoma City.

In Des Moines you could be making $50,000, but afford as much as someone making $60,000 in Oklahoma City.

[DirtMagurt]

Originally Posted by Chicago60614

Iowa's never had the LOWEST cost of living. It's below the national average, but normally ranks right around the 15th lowest cost of living of the 50 states. Southern and Midwestern states are lower. The issue here is that Des Moines has that low cost of living, but at the same time the people there have a higher than average level of pay. Normally those two items trend together. Des Moines is more unique because they pay you more, but things cost less.

People always say, well you get paid $50,000 in NYC, but you can buy the same amount of things as someone who only makes $40,000 in Oklahoma City.

In Des Moines you could be making $50,000, but afford as much as someone making $60,000 in Oklahoma City.

Didn't I state outright in the second post that we're talking about relative COL and not absolute COL (relative to wages)? I think Iowa has had the lowest relative COL for a long time, decades even.

This seems tortured anyway. In DSM you have a higher percentage of income left over, that doesn't mean you have more actual dollars left over than somebody in Manhattan or San Francisco, it just means that COL in DSM occupies a smaller percentage of their gross income. Somebody in DSM has a median income of $55k-ish while somebody in Manhattan would have that left over even after paying their exorbitantly high COL. Obviously that's an extreme example.

[capitalcityguy]

Originally Posted by pepe1

I agree. Many publications seems to zero in on 'low housing prices' when it comes to Des Moines and fail to really look at the whole picture. Property taxes in the Des Moines area are outrageous. My property tax bill is easily double what I paid when I lived in Minnesota.

So we pay a little less for our housing upfront in Des Moines, but get the bee-geezus taxed out of us on the property tax bill. Net effect: Total housing cost is about the same as anywhere else.

But that wasn't the only factor. Property taxes are part of COL, so they were figured in. Just because your property taxes were lower in Minny, doesn't meant you didn't pay more in other expenses than you do in Iowa.

This publication doesn't have a dog in the fight, so it is a bit naive to try and assume they are gaming the numbers somehow.

[tollfree]

Iowa income tax is ridiculous. You have the lowest threshold ($63,315) for paying the highest percent of state income tax at 9%.

Meaning, you pay the same percent at 63k that someone making 200k and up pays. Almost 10% of your earnings if you make 63K and up goto state income tax.

California is higher (9.3 percent at 47k), but that is also California. Not exactly known to be cheap.

[naycherboy]

Don't forget that your federal taxes are deductible in Iowa. So if the top state rate is stated at 9%, the actual rate is 65-80% of that.

[capitalcityguy]

It was confirmed that NBC Today show was going to feature Des Moines this week, but no one seemed to know why. It was leaked today that they have determined Des Moines to be the "Wealthiest". hummm....

http://blogs.desmoinesregister.com/d...s-area/article

[atler8]

I'm waiting for the skeptics & naysayers to turn up here again.

[lurtsman]

Since the thread was resurrected, I went over the initial article.

The research quality is poor at best. Taxes are not explicitly factored in. Despite claims that it was doing during COL, there is absolutely no proof. Many COL rankings completely ignore state income taxes, especially when they are ranking cities.

Using Median Household is an effective way to bias the list towards areas that do not have youths living alone.

Simple scenario: If you and your friend both have apartments and make 30k per year, you have 2 entries of 30k into the formula. If you decide to rent a larger apartment together, you have one entry for 60k per year as a "house hold", but you are not actually wealthier.

I'm not going to wait around for contradictory posts that are short on evidence and long on breath. I won't revisit this thread.

Anyone intelligent reading this will be able to tell that this analysis is spot on, and that the later insults are not.

[runewell]

Originally Posted by RonnieJonez

Iowa income tax is ridiculous. You have the lowest threshold ($63,315) for paying the highest percent of state income tax at 9%.

Meaning, you pay the same percent at 63k that someone making 200k and up pays. Almost 10% of your earnings if you make 63K and up goto state income tax.

California is higher (9.3 percent at 47k), but that is also California. Not exactly known to be cheap.

It's two years later; the threshold is now $67,300 where the marginal tax rate hits 9%. Ronnie's statement is grossly inaccurate however: someone at $67,300 taxable income only pays $4,257 in taxes (6.33%). It is only dollars above this threshold that are taxed at 9%. Someone making 63K in 2011 did NOT pay the same rate as someone paying 200K.

And this amount is after deducting all the schedule A stuff except for IA taxes, so you could make more and have deductions and not hit the 9% wall.