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Analysis examines what it's like to be a 'rich' family in America
Fiscal Times via Washington Post ^ | December 10, 2010 | Karen Hube

Posted on 12/10/2010 4:06:28 PM PST by KingofZion

In the heated battle over extending the expiring Bush-era tax cuts, a single number has emerged from the crossfire: $250,000. It's the annual income that President Obama and others have repeatedly used to define what it means to be "rich" in America today. And even though a tentative deal has been reached on the cuts, $250,000 is etched in the minds of policymakers and pundits as the number that separates the middle class from the wealthy.

By most measures, a $250,000 household income is substantial. It is six times the national average household income, and just 2.9 percent of couples earn that much or more. ***

But just how flush is a family of four with a $250,000 income? Are they really "rich"?

To find the answer, BDO USA, a national tax accounting firm, computed the total state, local and federal tax burden of a hypothetical two-career couple with two children, earning $250,000. ***

The bottom line: It's not exactly easy street for our $250,000-a-year family, especially living in high-tax areas on either coast. *** The worst: Huntington, N.Y., and Glendale, Calif., followed by the District, Bethesda, Alexandria, Naperville, Ill. and Pinecrest, Fla. In Plano, Tex., the couple's balance sheet would end up positive, but only by $6,114. ***

In short, even if they're in the top 5 percent of earners, they're not "wealthy."

In reality, to make ends meet, this couple would have to cut back on discretionary expenses - take a pass on a new suit, skip an annual vacation and drop some activities for the children. Unfortunately, the family would also probably save less, at the expense of their retirement or the college funds.

(Excerpt) Read more at washingtonpost.com ...


TOPICS: Business/Economy; Government; News/Current Events
KEYWORDS: 250000; amt; rates; tax
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Finally a study that explains why those of us with families who make $250k are not rich, cannot save, and cannot move to low tax states. This also explains why my wife will be quitting her job next year - because we actually make more money after eliminating childcare expenses and additional taxes.
1 posted on 12/10/2010 4:06:31 PM PST by KingofZion
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To: KingofZion

Big difference between making $250K before taxes and $250K net after taxes.


2 posted on 12/10/2010 4:10:47 PM PST by dfwgator (Congratulations to Josh Hamilton - AL MVP)
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To: KingofZion

Which is all good and find (and correct) but won’t matter a whit to the twits who want your money. The way to rephrase the argument is to start reminding people that none of anyone’s money belongs to anyone except for the person who made it. We need to stop letting Washington talk about our money as if it’s first and foremost theirs. Strangely I put something to this effect on my FB page and guess what? Even my liberal friends LIKED it. Republicans have allowed the Democrats to phrase the argument in their favor for so long that people think of all money as belonging to the government. We have to start to change THAT.


3 posted on 12/10/2010 4:12:50 PM PST by brytlea (Jesus loves me, this I know.)
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To: brytlea

It’s looking like the extension of the current rates will not happen yet this year. Not a totally bad thing, because on Jan 1, 2011 all tax paying Americans will discover the news that they are indeed “RICH”


4 posted on 12/10/2010 4:23:10 PM PST by Mygirlsmom (On Jan 1, 2011 all tax paying Americans will discover the news that they are indeed "RICH")
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To: KingofZion

Excellent points. Kinda weakens the case against federal government employees “getting rich.” Feds are in the same boat as everyone else in the middle class.


5 posted on 12/10/2010 4:30:05 PM PST by Poundstone (A recent Federal retiree and proud of it!)
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To: Mygirlsmom

Never hurts for people to get slapped in the face by reality, I suppose.


6 posted on 12/10/2010 4:31:22 PM PST by brytlea (Jesus loves me, this I know.)
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To: Poundstone
Kinda weakens the case against federal government employees “getting rich.”

No - just "richer" (than their private sector counterparts)

7 posted on 12/10/2010 4:33:48 PM PST by Puddleglum ("due to the record harvest, rationing will continue as usual")
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To: dfwgator

CNN a few years ago had a neat calculator. You entered your zip code, and another zip code. It evaluated what the difference in income needed for the same lifestyle was, between the two places. I live in Tacoma, and I compared Irvine CA. I had to make 2x as much to live there, for the same lifestyle, NOT including State Income Tax.

I’d bet, that households that make 250k by a degree of 90% plus, live in some of the most expensive zip codes in the USA. Bottom line, without those wages, they could not afford to live there.


8 posted on 12/10/2010 4:37:54 PM PST by Professional
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To: KingofZion
I wonder if their study included my sister and brother-in-law who put their son thru 4 years of college at a private college in Mass., then thru Univ. Mich. Medical School, then the University of Pittsburg medical school and finally Harvard Med...........without any govt. funds whatsoever because of their income status.

I wonder if that study also included the monies spent on their daughter who went thru med school without any scholarships and is now an emergency room doctor here.

And I wonder if that study also includes all the charities they historically contribute to here in S.E. Michigan and the charities hosted by St. John Hospital which my bro-in-law is a member of, or the occasional weekends he devotes his time to at St. John's "hippie clinic" where he volunteers his time as an oncologist helping people with no incomes or insurance..........

Probably not......

9 posted on 12/10/2010 4:39:19 PM PST by Hot Tabasco (There's only one cure for Obamarrhea......)
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To: Hot Tabasco

Or the same loss of investments that all of us experienced back in 2008...............probably not.


10 posted on 12/10/2010 4:40:44 PM PST by Hot Tabasco (There's only one cure for Obamarrhea......)
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To: KingofZion
Property taxes are also increasing even though real estate values have cratered.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Property taxes = Schools!

In our county nearly 70% of our property taxes go to fund atheist, collectivist, compulsory indoctrination camps (misnamed “public” schools) that are managed by an NEA anointed and Marxist supporting peoples collective ( mis-named “school board”).

11 posted on 12/10/2010 4:42:40 PM PST by wintertime (Re: Obama, Rush Limbaugh said, "He was born here." ( So? Where's the proof?))
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To: KingofZion

One thing this article points out that is very true: most of the “rich” have huge mortgages and pay insane property taxes for houses that are not that great or, if the “rich” live in the city, are small condos. While not as uniform, most of the “rich” live in very high income tax jurisdictions. If this debate was about fairness (LOL), some type of purchasing power parity index would be used.

What this really points out is the value of devolving spending to the states. Moreso than the federal government, states can set progressive taxes that are more in tune with local purchasing power.


12 posted on 12/10/2010 4:49:57 PM PST by Opinionated Blowhard
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To: KingofZion

AND not to mention work clothes, gas, and lunches to name a few.


13 posted on 12/10/2010 4:54:15 PM PST by Kackikat (There is no such thing as a free lunch, because someone paid, somewhere.)
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To: KingofZion

The left has succeeded in renaming the working class “Middle class”. The true middle class - entrepreneurs, land owners, doctor, lawyers, high level managers etc. earn from $250K to $1million or so. People who make $25 per hour ($50K per annum) are not middle class. They are working class. But in today’s America, anyone not on the dole is called “Middle class” and the true middle class are characterized as “The Rich”. The truly rich are the ones playing games with the rest of us; the Kerrys, Bushes, Pelosis, Kennedys, Soros et al.


14 posted on 12/10/2010 5:10:07 PM PST by Chuckster (The Department of Homeland Security is the schoolyard bully of the United States.)
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To: KingofZion
Taxes take a hefty toll. Everything from property taxes and the alternative minimum tax to the taxes tacked on to cellphone bills and the cost of gas, when combined, takes a large bite out of earnings - in some cases even more than the federal income tax toll.

But I thought the rich didn't pay any taxes? It was on the news, so it must be true. :)

15 posted on 12/10/2010 5:11:57 PM PST by Mr. Jeeves ( "The right to offend is far more important than any right not to be offended." - Rowan Atkinson)
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To: KingofZion

I remember hearing about my father making over $300,000 one year and only having $38,000 to show for it after taxes and etc.


16 posted on 12/10/2010 5:19:05 PM PST by MeganC (January 20, 2013 - President Sarah Palin)
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To: brytlea
The way to rephrase the argument is to start reminding people that none of anyone’s money belongs to anyone except for the person who made it. We need to stop letting Washington talk about our money as if it’s first and foremost theirs. Strangely I put something to this effect on my FB page and guess what? Even my liberal friends LIKED it. Republicans have allowed the Democrats to phrase the argument in their favor for so long that people think of all money as belonging to the government. We have to start to change THAT.

Agreed. Add to that, stop talking about how much a tax cut is going to "cost the government." That is just another way of saying that it is the government's money and not my money. I just want to slap somebody every time I hear that.

What's more, it's been shown over and over again that every time taxes are cut, the government actually collects more money!

17 posted on 12/10/2010 5:30:01 PM PST by susannah59
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To: KingofZion

If somebody is making $250K and they end up with only six grand and change after an ‘average’ lifestyle for a year, then something is terribly wrong with the average lifestyle.

If you want to be rich, lower your expectations and you’ll become rich overnight.


18 posted on 12/10/2010 5:33:19 PM PST by WorkingClassFilth
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To: susannah59

Exactly. And that’s what I’m preaching these days. Tax cuts do not cost the government anything since it’s not their money to begin with.


19 posted on 12/10/2010 5:34:49 PM PST by brytlea (Jesus loves me, this I know.)
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To: brytlea
I remember growing up and my best friend's dad made a lot of money one and paid over 90,000 in taxes in the 1960's.

He framed that check and hung it in the kitchen.

20 posted on 12/10/2010 5:44:54 PM PST by scooby321
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