Skip to comments.Is $250,000 a Year Rich? Let's Break It Down
Posted on 11/14/2012 7:07:18 AM PST by SeekAndFind
Its no surprise that working couples in big cities are struggling to raise children while paying off mortgages and student debt. What is surprising is that theyre lumped in with the so-called wealthy if they jointly earn $250,000 a year.
The "fiscal cliff" has added a new sense of urgency to the tax hikes that President Obama plans to impose on Americas wealthiest citizens. Obama starts the meter at $250,000, and it goes up from there. The tax increases on high-income earners would deliver about $42 billion in 2013. They would create a small 0.1 percent drag on GDP, according to the Congressional Budget Office, but their real cost might be much steeper.
Those tax increases arent the only ones that would kick in next year. In California, new tax propositions will create four new brackets for earners making $250,000 or more. Those taxpayers will see their state income taxes jump between 10.6 percent and 32.2 percent, depending on their bracket. Other states in fiscal straits could follow suit, and Republicans, among others, worry that soaking the rich could weigh on consumer spending and leave the entire economy under water.
Discretionary consumer spending is the engine that drives the U.S. economy. And high-income earners drive it more than middle- and low-income earners. Gallups daily tracking of consumer spending showed a dip last month among upper-income consumers an average of $116 per day, down from $126 in September. If that dip continues into the holiday buying season, the economy could suffer a setback.
I'm Wealthy? That's Rich
By most measures, a $250,000 household income is substantial. It is five times the national average, and just 2.9 percent of couples earn that much or more. For the average person in this country, a $250,000 household income is an unattainably high
(Excerpt) Read more at cnbc.com ...
Iy depends on the source of the income. If it’s all from investments, then they may be rich. If it’s all from labor, then maybe not.
The irony is that this is going to serve to subvert the Agenda 21 objectives of herding people into the cities. People will start moving to rural/unincorporated areas just to get out from under the additional tax burden of municipal government.
The longer I am on this roller coaster, the more I come to believe that the proper taxation method is “representative apportionment”. By that, I mean that Congress decides how much to spend and also how much to tax. However, the amount raised in taxes would only be a specific dollar figure. That figure would then be broken down as follows:
50% of the total would be divided by 100 to obtain a per Senator cost.
50% that remains would be divided by the current number of the house seats to obtain a per congressional district cost.
Each state’s cost would be the sum of each of it’s Senator’s costs plus the sum of each congressional district’s cost. You could then divide the State’s cost into quarterly or monthly invoices.
That bill is then delivered to the State and the state would then be able to use it’s own internal taxation laws to raise the required revenue.
There would of course be penalties for those states that were late or not current. Things like automatic loss of chairmanships, membership in committees, loss of floor votes etc.
That depends on where someone lives. There are huge variations in the cost of living between major cities and wealthy suburbs, and smaller towns and rural America.
Being “rich” has very little to do with your income level in any particular year. When people think of “rich”, they are really referring to how much wealth someone has accumulated. A person making $250,000 this year may have made considerably less last year and may make more or less the year after.
If you are a single person, with no dependants, own your own house and live in a low tax state and in a community with reasonable housing costs, then $250,000 is very comfortable. If you are married, have two kids in college,have to save for your own retirement, a mortgage in a high cost housing area, and have to spend considerable amounts on commuting, then $250,000 is comfortable in terms of your day to day living expenses, but leaves little room for any significant wealth accumulation.
Keep in mind that the person who is making the $250,000 is likely working his or her butt off to make that money and in many cases is an entrepreneur taking all the risks. If that person has an opportunity to work an extra hour per day and make another $50,000 per year, why would they put in that effort if the additional income is going to be subject to confiscatory rates of taxation?
I make a decent income which puts me in the highest marginal tax bracket in my province. I could make additional income if I sacrificed more family time in favour of longer work hours. I would consider doing that if I thought my family would benefit, but I can’t justify working those hours when the government is taking 50% of every dollar earned above the highest bracket level. When you factor in all the taxes that apply when you actually spend that money, I am getting much less than 50% value in each additional dollar I earn. That is being a slave to the state.
RE: That depends on where someone lives. There are huge variations in the cost of living between major cities and wealthy suburbs, and smaller towns and rural America.
Cold comfort to those living in bigger cities. Heck, most decided to live in bigger cities PRECISELY because the opportunities for advancing and earning more money are better. How the heck did they now become the group to be fleeced in Obama’s world?
More evidence of our ignorance of economic matters. High income does not equal wealth. It’s not how much you make that matters but how much you manage to keep.
I closed one of my businesses before the election. I’ll probably start cutting back on my primary business after the first of the year. The marginal dollars really aren’t worth it.
Raising taxes on one segment of the population based on income is bigotry.
That is middle class here in commifornica.
If you are like me and make only $50G a year $250G is a lot. If you make $2M a year, $250G don’t cut it. But if you make only $10G, my $50G is a lot.
The nation is falling under the spell of communism and some jackass feels the need to argue that $250K a year isn't rich ?
There are millions of families who work hard, play by the rules, struggle, don't accept welfare, will go thier entire lives without a real vacation or a new car. This is the problem with and difference between conservatives and Christians. Christians help and uplift the poor with charity and fiscal conservatives fertilize the garden of communism by grinding the faces of the poor with greed.
There is no better way on earth to turn the struggling working poor to the left.
Did they earn it ?...Yes. Do they deserve it ?...Probably. Are they rich ? ABSOLUTELY.
RE: But if you make only $10G, my $50G is a lot.
So, the $10G guy think you’re 5 times richer than he is? You need to be taxed more for the sake of fairness, says he...
“The irony is that this is going to serve to subvert the Agenda 21 objectives of herding people into the cities. People will start moving to rural/unincorporated areas just to get out from under the additional tax burden of municipal government.”
Unfortunately, taxation is just one prong of the three-prong attack on suburbia. The other two are jobs & energy. In order to live in suburbia, you need a decent income to pay for the house, etc... Those jobs are being destroyed by 0bamacare, which is the second prong of attack. The third prong is energy policy. Suburbia cannot exist without cheap, abundant energy. Starve suburbia of energy, and it withers and dies.
With all three prongs, the sheep will be herded into the cities where they will no longer be prosperous, independent and conservative/Republican. Instead they will be poor, dependent and good little communists. Thus Agenda 21 is merely part of the communist movement to cement perpetual political power. I doubt that more than a small fraction of suburban dwellers will go to boonies to live. Without the jobs & energy, they can’t take their creature comforts with them. They don’t have the mindset or skills to make a go of it off the land. The cities will seem the better option, and the vast majority will take it.
Since the media aided and abetted in the election of 0bama, the point of no return has been passed. I’m of an age where I can probably get by. But I went to a wedding last weekend, where I looked at the young couple and their friends and thought “I hope they enjoy being good little communists in the collective.”
Read the comments after the article. They are proof of why Obama won. Scary.
I still need clarification:
Is the $250,000 number a GROSS income?
ADJUSTED GROSS income (AGI)??
NET TAXABLE income?
Those are 3 VERY different numbers.
Can anyone clarify this for me??
“Obama starts the meter at $250,000, and it goes up from there. The tax increases on high-income earners would deliver about $42 billion in 2013.”
0bama has clearly stated that this tax increase would raise $1 Trillion dollars over 10 years.
This is another thing republicans failed to point out during the campaign.
Al Gore famously (and the members of the Obama administration since) have argued that if you earn $250,000 you ARE a millionaire.
It is simple class envy and nothing but. Fudge the numbers to whip hysteria and greed.
Envy is against one of the 10 Commandments (so there goes Obama’s “historical Jesus” argument that we are biblically dictated to give to the welfare State). It is also one of the 7 Deadly Sins.