| I love living in a high cost of living area!
Chew on this:
If, say, the cost of housing = 50% of income and your monthly income is $2,000, then you have $1,000 left over for everything else. What ever you buy locally may cost more in a high cost of living area, but everyone is in the same boat, so income is adjusted to compensate to a great degree. But whatever is purchased from the national/global market costs the same for everyone! OK, local taxes will have a small influence on the cost, but this is minor compared to the differences in income from place to place.
So now let's make the income $10,000 per month. The housing is still 50%. That leaves $5,000 for the rest. But all of the the staple items that I get from Amazon through 'Subscribe and Save' still cost me the same as it would if I was living in a cheaper, lower income area. If I was taking $500 of my monthly income and spending it online then it is only 10% of what I have available instead of 50% of the previous examples amount.
When you want a new piece of gear from a national vendor would you rather be the first case or the second?
Other things scale in favor of high cost/high income. How about rewards on credit card purchases? If things cost me twice as much (but I'm paid about twice as much) then I get twice the rewards/miles/etc. on each purchase! When I spend those rewards in a national/global market my rewards go twice as far.
Hey, what if I'm homeless in a high cost of living area? Well that is better as well... What ever assistance I receive (from local sources) is scaled up and goes further when I spend it at a store that is using national pricing. Chain stores are quite likely to have the same or close to the same pricing everywhere.
High sales tax is a penalty against the poor for sure though and that is why the wealthy like to use it to run government because, as you can see, the richer you are, the less of your income goes to taxable expenses and therefore a smaller percentage of your income pays for government as compared to the poor.
$.02 |