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Is $250,000 a Year Rich? Let's Break It Down
CNBC ^ | 11/13/2012 | By: Jacqueline Leo

Posted on 11/14/2012 7:07:18 AM PST by SeekAndFind

It’s 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 they’re 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 America’s 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 aren’t 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. Gallup’s 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 ...


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: fiscalcliff; rich; taxes

1 posted on 11/14/2012 7:07:23 AM PST by SeekAndFind
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Comment #2 Removed by Moderator

To: SeekAndFind

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.


3 posted on 11/14/2012 7:12:25 AM PST by Daveinyork (."Trusting government with power and money is like trusting teenaged boys with whiskey and car keys,)
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To: SeekAndFind

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.


4 posted on 11/14/2012 7:15:02 AM PST by tacticalogic ("Oh, bother!" said Pooh, as he chambered his last round.)
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To: SeekAndFind

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.


5 posted on 11/14/2012 7:15:44 AM PST by taxcontrol
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To: SeekAndFind

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.


6 posted on 11/14/2012 7:17:23 AM PST by Will88
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To: SeekAndFind

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.


7 posted on 11/14/2012 7:19:52 AM PST by littleharbour
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To: Will88

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?


8 posted on 11/14/2012 7:22:51 AM PST by SeekAndFind
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To: SeekAndFind

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.


9 posted on 11/14/2012 7:23:30 AM PST by slumber1 (Don't taze me bro!)
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To: SeekAndFind

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.


10 posted on 11/14/2012 7:27:51 AM PST by dangerdoc (see post #6)
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To: SeekAndFind

Raising taxes on one segment of the population based on income is bigotry.


11 posted on 11/14/2012 7:33:31 AM PST by Proud2BeRight
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To: SeekAndFind

That is middle class here in commifornica.


12 posted on 11/14/2012 7:37:44 AM PST by US_MilitaryRules (Unnngh! To many PDS people!)
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To: SeekAndFind

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.


13 posted on 11/14/2012 7:58:08 AM PST by Phlap (REDNECK@LIBARTS.EDU)
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To: SeekAndFind
I really take offense to articles like this one.

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.

14 posted on 11/14/2012 8:07:17 AM PST by SENTINEL (Election 2012....One more false prophecy by FLDS/LDS "prophet" Joseph Smith)
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To: Phlap

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...


15 posted on 11/14/2012 8:16:13 AM PST by SeekAndFind
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To: tacticalogic

“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.”


16 posted on 11/14/2012 8:20:28 AM PST by henkster ("The people who count the votes decide everything." -Joseph Stalin)
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To: slumber1

Read the comments after the article. They are proof of why Obama won. Scary.


17 posted on 11/14/2012 8:23:12 AM PST by sheana
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To: SeekAndFind

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??


18 posted on 11/14/2012 8:39:12 AM PST by ridesthemiles
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To: SeekAndFind

“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.


19 posted on 11/14/2012 8:51:12 AM PST by PMAS (All that is necessary for the triumph of evil is that good men do nothing)
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To: SeekAndFind

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.


20 posted on 11/14/2012 8:59:16 AM PST by a fool in paradise (America 2013 - STUCK ON STUPID)
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To: a fool in paradise

RE: Al Gore famously (and the members of the Obama administration since) have argued that if you earn $250,000 you ARE a millionaire.

With apologies to the late Patrick Moynihan, I call this defining millionaire down. With our debt and deficit, pretty soon, everyone will be considered rich enough to tax in their eyes ( well maybe not the 47%, but then, who’s to say that number won’t increase past 50% real soon?)


21 posted on 11/14/2012 9:03:52 AM PST by SeekAndFind
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To: SeekAndFind

A 0.1 drag on the GDP, what a joke. The over 250k group does most of the consumer spending, investing, and pretty much all of the hiring. This is demoralizing for the productive class and many will slow down or go Galt. Just wait when the “rich” see how much they are losing in taxes next year. Do you think that they will work harder if that money goes down a black hole.


22 posted on 11/14/2012 9:03:56 AM PST by grumpygresh (Democrats delenda est; zero sera dans l'enfer bientot)
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To: a fool in paradise

RE: Al Gore famously (and the members of the Obama administration since) have argued that if you earn $250,000 you ARE a millionaire.

With apologies to the late Patrick Moynihan, I call this defining millionaire down. With our debt and deficit, pretty soon, everyone will be considered rich enough to tax in their eyes ( well maybe not the 47%, but then, who’s to say that number won’t increase past 50% real soon?)


23 posted on 11/14/2012 9:09:03 AM PST by SeekAndFind
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To: ridesthemiles

I agree. Nobody is stating whether they are talking about gross, adjusted or taxable income. In some cases, it is a significant difference.

But is everyone missing the fact there appears to be a marriage penalty involved? If the individual level is $200,000, then shouldn’t the joint level be $400,000? Or in reverse, shouldn’t the individual level be $125,000 if the joint level is $250,000? If that is true, why would singles want to get married?

I thought I would throw that out there.


24 posted on 11/14/2012 9:10:00 AM PST by bushbuddy
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To: SeekAndFind

$250,000 is just a random number. It rolls smoothly off the tongue of the Community Organizer and his friends.

Anyone remember the episode of “TAXI” where the character Jim accidentally burns down Danny DeVito’s characters Apartment?

Jim’s Father, a Lawyer, agrees to pay for the damage and los. Danny DeVito is pacing the floor trying to come up with a number. He is trying desperately to figure out a number big enough to enrich himslf but small enough to not scare away Jim’s Father.

Finally after five minutes of arguing to himself he says give me $25,000 or something like that. After Jim hangs up the phone, DeVito says well? Jim says OK, he will give you the money. DeVito is really proud of himself until Jim says, he was worried you would want $100,000. DeVito collapses on the floor.

The Liberals have set a line in the sand where $250,000 is the new “rich”, and everyone in power has bought into it.
Just like the Minimum Wage or CAFE standards, the Sheeple eat it up. We are all Comrades now.

My Father told me people live with what they earn. Well, not anymore but you get the picture. When I was young I would think to myself, if only I made a certain amount of money I would have it made. Well, I worked hard and made more than that imaginary amount, but I never had it made.


25 posted on 11/14/2012 9:16:12 AM PST by Kickass Conservative (Win or lose, Impeach Obama Ben Ghazi...)
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To: Proud2BeRight

Raising taxes on one segment of the population based on income is bigotry.”””

It certainly is discrimination.


26 posted on 11/14/2012 9:24:46 AM PST by ridesthemiles
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To: SeekAndFind

i live in california. I make about 70k a year, but i don’t work, i get a gov pension and own 5 house and have no mortgage on any of them.
I feel rich.


27 posted on 11/14/2012 10:34:38 AM PST by genghis
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To: SeekAndFind

If it’s more than the takers make, then it’s rich.

And don’t spend too long dwelling on the 250k figure. It will come down just as soon as it’s learned the revenue doesn’t cover the problem.

But, then, the upside is that, pretty soon, we’ll all be rich...by definition.


28 posted on 11/14/2012 10:38:13 AM PST by DPMD
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To: SeekAndFind

The 47% will be hit with backdoor taxes (”watch yore cornhole buddy!”) through higher cigarette taxes, fat taxes, sugar taxes, corn taxes, health insurance taxes...


29 posted on 11/14/2012 11:59:12 AM PST by a fool in paradise (America 2013 - STUCK ON STUPID)
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To: ridesthemiles; Proud2BeRight

An old thread with a 1939 conservative booklet (”The Revolution Was”) about FDR and the New Deal. It’s all happening again, almost down to the same wording that Obama uses. It is a long booklet, but here is an excerpt as “obscene profits”.

http://www.freerepublic.com/focus/f-news/2185147/posts

..... “We cannot go back to the old order,” said the President [FDR]. And this was a very hateful counter symbol, because the old order, never really defined, did in fact associate in the popular mind with the worst debacle in the history of capitalism [the Crash of ‘29].....

Large profit as such becomes therefore a symbol of social injury, merely because it is large; moreover, it is asserted that large profit had long been so regarded by the government and penalized for that reason.

Of all the counter symbols this was the one most damaging to the capitalistic system. Indeed, if it were accepted, it would be fatal, because CAPITALISM IS A PROFIT AND LOSS SYSTEM and if profits, even very large profits, are socially wrong, there is nothing more to be said for it [capitalism].

But it was a false symbol, and false for these three reasons, namely: first, there is no measure of large profit; second, large profits are of many kinds and to say simply that large profits are “of course made at the expense of the neighbors” is either nonsense or propaganda, as you like; and; in the third place, the history is wrong....

So, what the New Deal really intended to do, what it meant to do within the Constitution if possible, with the collaboration of Congress if Congress did not fail, but with war powers if necessary, was to REORGANIZE AND CONTROL THE WHOLE ECONOMIC AND THEREFORE THE WHOLE SOCIAL NETWORK OF THE COUNTRY.

And therein lay the meaning — the only consistent meaning — of a series of acts touching money, banking and credit which, debated as monetary policy, made no sense whatever.


30 posted on 11/14/2012 12:13:46 PM PST by 21twelve (So I [God] gave them over to their stubborn hearts to follow their own devices. Psalm 81:12)
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To: SeekAndFind

The move is for exemptions for the NYers and other DNC enclaves.


31 posted on 11/14/2012 3:16:44 PM PST by NoLibZone ("When the people find they can vote themselves money, that will herald the end of the republic")
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