Analysis examines what it's like to be a 'rich' family in America

Fiscal Times via Washington Post ^ | December 10, 2010 | Karen Hube

[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.

[Eagle Eye]

Assuming the $250k is gross, dual income, family income it can go very quickly.

Buy all the insurance one is supposed to, put away some in 401k, pay taxes, put some towards kids college and braces, then what’s left over is still more than what most of us have but it isn’t rolls royce money.

$250k people don’t live where I live and don’t drive what I drive...so they are probably just as broke just at a higher standard of living.

And they certainly don’t feel rich.

[PapaBear3625]

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.

It's even uglier when you have kids of college age. Forget about financial aid, you pay full ticket price unless the kid is brilliant enough to score some merit-based scholarships in a second-tier school.

[brytlea]

We put 3 kids thru college. One did get a partial merit scholarship to a private school because he went out and hustled. The other two went to state schools which we paid for (I think both of them got a few very small (like 100 or 200$ scholarships) and some loans which we are paying off as well. We started out with nothing. My husband made 5000$ the first year we were married and we had a child, and I didn’t work. He later went back to college and got his degree, and then got a better job. When our kids started school I also went back to college and got my degree, so I could help pay for their college, altho I was essentially a stay at home Mom.
We made our choices, and we lived with them. We did what we needed to do to make our lives work for us and for our kids. I’m not sure why our money belongs to a politician so he can dole it out in return for votes. I really don’t.

[PapaBear3625]

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.

An important point. If you sit in a cubical instead of an office with a door, then you are working class, per traditional ways of defining such.

I personally define "The Rich" by lifestyle rather than income. If you cannot afford to maintain at least one full-time household servant, then you are not rich.

A friend of my wife is somebody who I would consider being on the bottom end of "The Rich": she doesn't work a job, living on investment income inherited from her father. She has one full-time, live-in housekeeper plus two part time women who come in as needed. She lives in a mansion and goes on several vacations per year. And she's nowhere near Kennedy-style "rich"

[Koracan]

With 250000 income using the "global rich list calculator", result:

.....you are the 107,565 richest person in the world! You're in the TOP 0.001% richest people in the world!