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There are a couple of separate problems in this article, both stemming from the same root cause ... living on more than you make. The government overspends, and thus rides high-earners really hard — making their lives harder. And then there’s this ...

>> Even then, I argued, the HENRYs were so squeezed between their big expenses for the things they considered staples — private schools and day care for the kids, for example — and an immense tax burden that typically took at $100,000 from a $350,000 income, that they not only weren’t rich, but stood little chance of ever saving the big nest egg to qualify as truly wealthy.

Taxes are only part of the problem here. Their lifestyle matches or exceeds their income. They spend every dollar they make on “staples” that aren’t really staples. People making $250K+ are make too much money to be broke at the end of every payperiod.

If you live like you make $150K, you’ll be surprised how rich you get making $250K. But, if you live like you make $250K or $350K ... you’ll die penniless.

Likewise, if the government spent less than they make, they’d be surprised how fast they could turn this thing around ... and how fast they could ease the burden on the citizens.

SnakeDoc

>> Even then, I argued, the HENRYs were so squeezed between their big expenses for the things they considered staples — private schools and day care for the kids, for example — and an immense tax burden that typically took at $100,000 from a $350,000 income, that they not only weren’t rich, but stood little chance of ever saving the big nest egg to qualify as truly wealthy.<<<

Taxes are only part of the problem here. Their lifestyle matches or exceeds their income. They spend every dollar they make on “staples” that aren’t really staples. People making $250K+ are make too much money to be broke at the end of every payperiod.

Depending on the public school district, a private school or a home school education is a staple if you have any regard for your children's welfare.

The people who live "paycheck to paycheck" usually have a net worth close to or under zero. They are in the same category as those fools in sports that earn tens of millions of dollars and end up filing for bankruptcy in their late 30's when their playing skills are gone.

The HENRY' in this article, as the author states, end up with about $2 million in savings at the end of their working lives.

If you live like you make $150K, you’ll be surprised how rich you get making $250K. But, if you live like you make $250K or $350K ... you’ll die penniless.

That depends on how you define "rich".

Towards the last half of each tax year, I get taxed at the same tax rate as Bill Gates for every dollar I earn.

I am very frugal (my car is 18 years old) and I follow the "Millionaire Next Door" philosophy.

Yet, I will never be "rich" in the true sense of the word.

Money is what you trade your time and life energy for if you actually work for a living. If you put in the time and sacrifice to make $300,000 or more per year after years of climbing up the ladder to make that level of income even possible, you realize that the Government has taken over $100,000 in taxes each year.

If you spend $100,000 per year and save $100,000, it takes you ten year to save each million for retirement. (Social Security ain't going to be there for you.)

By the time you are in your 50's and pretty much burned out, yes, you will have around $2 million in the bank but that is not "rich" considering that you have traded away most of your quality of life since you started competing at a high academic level in college at age 18, and then worked 60 or 70 hour per week, to save an amount of money that will amount to $50,000 per year for the next 20 years if you get off the rat race.

There comes a point where it simply isn't worth the sacrifice that it takes to make those sums of money, no matter how frugal you are.

I have voluntarily cut back on my work and, for the first time in years, my federal income taxes have been below $100,000 this past year. I am much happier now.

Once the Government's share of the benefits of your work crosses a certain tipping point, Atlas Shrugs.

Their lifestyle matches or exceeds their income.

But it didn't previously. They made lifestyle commitments that they thought they could afford, and it isn't frictionless to wind them down.

But, that's not the real problem here--it's that taxes and regulation are getting high enough to make it seem a better trade to work less and live on a lower budget. That means less output from productive people, and less trickle-down.