I have a problem with the definition of Rich

[Anonymous]

Sorry to disappoint, but the federal defined benefit plan for fed employees hired after 1982 is paltry. And, republicans are doing everything they can do make it even more worthless.

[Anonymous]

jsteele wrote:

Anonymous wrote:I keep hearing that I am on the verge of being "rich" because combined, my school teacher husband and I are on the verge of making $250K. Why don't I feel rich?

I can't explain your feelings. But, much of the focus on the $250K number is because that is the point at which Obama wants to increase the marginal tax rate. There are a couple of things to keep in mind about this:

1) as I said, the tax rate is marginal and will only apply to taxable income above $250,000;
2) the proposed increase is 3%

You probably have $10-$15 thousand in deductions. So, before the tax increase even hits you, you would have to be making in the neighborhood of $265,000. Then, the tax would be an extra $300 per $10,000 which doesn't seem excessive. If your income grew to $300,000 your additional tax burden would be $1050. If your income was $400,000 you would see an additional $4050 tax. Still hardly noticeable. So, when Obama talks about the rich paying more, he means those who are really rich. Because those who are like you and "don't feel rich" aren't rich and won't be paying very much more -- if anything at all.

There's one more thing to keep in mind. As of 2009, the "1 percenters" paid almost 37% of all incomes paid into the Treasury. Yes, more than 1 in 3 of all (ALL!) tax dollars was paid by just 1 percent of the population. The top 5% paid almost 60% of all tax dollars collected. The people between 5 and 10%? They paid another 11% of all tax dollars. Thinking about it in reverse, the bottom 50 of wage earners, the poorest of the poor, only paid 2.25% of all taxes collected. (Meaning, they are not taxed. Hardly at all.) The bottom 75%? They paid just 12.3% of all taxes. Again, hardly taxed. At all. You can't give a tax break to people who don't pay taxes to begin with. And that's pretty much 75% of all wage earners in this country, so says the IRS.

[The source of this data is the IRS. Link at the taxfoundation.org (see Table 6): http://taxfoundation.org/article/summary-latest-federal-individual-income-tax-data-0#table3]

[Anonymous]

Anonymous wrote:

Anonymous wrote:can i just say, there is a difference between making 200K and being able to spend freely, and then making 600K and not being able to.

Let me explain. Our family, makes 200K, we are a black, Silver Spring, MD family. Our DD goes to private school. We live in a 1600 sq SFH, and we both have a car that is paid off. So you see, we live within our means. yes things can be tight at times, but we don't try to live as if we earn 1M HHI. We dont. We are realistic when it comes to out finances, and we are therefore able to live comfortably. We have friends who live in Potomac in a 5000 sq house each with an expensive car, but they dont have 2 thin dimes to rub together because they do not live within their means.


So.. the reason that you may not "feel rich" is because 1. you aren't. and 2. you may not (and I dont know you and your finances so I cant judge) be living within what you can afford.

Not trying to start anything, but why did you feel the need to mention you are black?

hello, im the PP you quoted, i said it 1. because before i have been accused of being a "stuck up, spoiled white woman" and i think that is unecessary to say. there can be stuck up spoiled people of all races

and 2. because i was describing my family. just a typical family, nothing special. (not that its "nothing special bc of race... but you get what i mean)

[Anonymous]

Anonymous wrote:

Anonymous wrote:can i just say, there is a difference between making 200K and being able to spend freely, and then making 600K and not being able to.

Let me explain. Our family, makes 200K, we are a black, Silver Spring, MD family. Our DD goes to private school. We live in a 1600 sq SFH, and we both have a car that is paid off. So you see, we live within our means. yes things can be tight at times, but we don't try to live as if we earn 1M HHI. We dont. We are realistic when it comes to out finances, and we are therefore able to live comfortably. We have friends who live in Potomac in a 5000 sq house each with an expensive car, but they dont have 2 thin dimes to rub together because they do not live within their means.


So.. the reason that you may not "feel rich" is because 1. you aren't. and 2. you may not (and I dont know you and your finances so I cant judge) be living within what you can afford.

Not trying to start anything, but why did you feel the need to mention you are black?

Also not trying to start anything, but why did you ask that and not ask why he (or she) mentioned SS? I'd call it context-setting; it gave us a picture. Like it or not (and I don't), race is still a large factor in American life and the way we view every aspect of it.

[Anonymous]

You know what sucks? If you are taxed at the fed rate at 39% and then taxed at the CA rate of 10% , that's 1/2 your money going to taxes. WTF. How is it fair that for every 2 dollars I earn 1 gets taken. WTF. I bet people at the lower end wouldn't want 1/2 their money going to taxes.

[Anonymous]

Anonymous wrote:We have a HHI of about $190K with three kids. We both work and have to pay daycare/after school for public elementary.

We are without a doubt rich.

It's the big stuff..we live in a nice house in a safe neighborhood with good schools, but mainly the little stuff. When I was told that there was an extra $15 charge that I didn't know about for a girl scout outing, I paid it without worrying where that money would come from. When my daughter did something special yesterday and came home all excited, I was able to tell her that we would go out to her favorite restaurant (Silver Diner) to celebrate, and on a complete whim too the family out to dinner. When my winter coat lining tore, I bought a new one without checking my budget.

I agree completely. We bring home a fraction of most of those contributing here, but only stuff like new cars or a new roof stresses us out. And even then, it's not "we can't afford it!" but "aw man, that'll take the poof out of our cushion..."

[Anonymous]

Didn't you know the dc definition of middle class is "no financial challenges". And the definition of rich is "that guy who takes more outlandish vacations than me"

[Anonymous]

Anonymous wrote:

Anonymous wrote:I swear, I just don't get this.

I am in grad school and dh makes 60k. We live in a moderate income 1 bedroom apartment in a luxury building. We save at least 1k a month in addition to his retirement plan and some money in an IRA. We have a one year old dd. I don't feel poor, I actually don't feel any financial stress at all. We mostly cook our own food and I just don't buy things I can't afford. Soon we'll have more money, and I don't think I'll even change much about our lifestyle other than move to a slightly bigger place. I see my friends with more money and I don't really feel "oh I wish I had all that stuff" because I don't really see that they have anything that I want. I have a good dh and a healthy dd and I live in a clean, attractive home. My parents are in the top 1% and they're very much the same.

yes, but the feeling also has to do with how old you are. Are you 25?
Fantastic! Lots more time to save, move in the future, vacation, change careers you name it.
Or are you 45? Totally different feeling financially!!!

Yes, and it's not unusual for medical bills to increase substantially after 50+ years, even if you've been taking good care of yourself and are in reasonably good health. Pretty shocking, really.

[Anonymous]

You know what sucks? If you are taxed at the fed rate at 39% and then taxed at the CA rate of 10% , that's 1/2 your money going to taxes. WTF. How is it fair that for every 2 dollars I earn 1 gets taken. WTF. I bet people at the lower end wouldn't want 1/2 their money going to taxes.

Somalia is lovely this time of year...

[Anonymous]

I am the federal worker you are talking about.

I did not lament anything. I am confused as to why somebody making 90k less than me only brings home 12k less than me.

I know I have a retirement that will pay me $30k a year upon retirement. I get a raise every 3 years, in ten years I will only get COLAs.

1/2 of my child care deductions end this yr because my son is 13 and I guess it's okay for a 13 yo to stay home for 10 weeks without supervision.

I did not say I am upset about any tax increase - it is just confusing why I have such a low take home pay compared to what somebody making $160k brings home. I thinks it is good to understand instead of just paying the government $$$ and have no clue why.

I would gladly work part time and have my husband quit his 2nd job if we would have the same take home pay.

Anonymous wrote:

Anonymous wrote:can i just say, there is a difference between making 200K and being able to spend freely, and then making 600K and not being able to.

Let me explain. Our family, makes 200K, we are a black, Silver Spring, MD family. Our DD goes to private school. We live in a 1600 sq SFH, and we both have a car that is paid off. So you see, we live within our means. yes things can be tight at times, but we don't try to live as if we earn 1M HHI. We dont. We are realistic when it comes to out finances, and we are therefore able to live comfortably. We have friends who live in Potomac in a 5000 sq house each with an expensive car, but they dont have 2 thin dimes to rub together because they do not live within their means.


So.. the reason that you may not "feel rich" is because 1. you aren't. and 2. you may not (and I dont know you and your finances so I cant judge) be living within what you can afford.

I agree. People are always trying to keep up with their neighbors by spending beer money on champagne.

The federal GS14 poster lamenting about her six figure salary when she is maxing out her retirement and child care deductions. She failed to add that $5000 deduction back into her salary tax free. In addition to her maxed out 457 TSP, she is guaranteed a defined benefit upon retirement. She is guaranteed a monetary step increase almost every year, with or without a COLA. No, you are not rich. Romney is rich, but you are financially well-off income wise. Most Americans would trade your woe as me salary and benefits in heart beat and gladly pay the extra $200 proposed tax increase. bTW, you won't get hit with the increase due to your AGI.

[Anonymous]

Anonymous wrote:You know what sucks? If you are taxed at the fed rate at 39% and then taxed at the CA rate of 10% , that's 1/2 your money going to taxes. WTF. How is it fair that for every 2 dollars I earn 1 gets taken. WTF. I bet people at the lower end wouldn't want 1/2 their money going to taxes.

Your math doesn't apply to the HHIs we're discussing her. You would have to be over a million a year in income to actually feel that due to progressive tax rates.

[Anonymous]

I think we are missing pat of the point here.... The politicians say we need to raise taxes on the "rich" because they do not pay ENOUGH taxes. That somehow they take advantage of the system with all the deductions so that they pay little. The mitt Romney example. Or, that they need to pay more of their share. But for those in high cola areas where 250k does not necessarily allow you to accumulate lots of low taxed wealth, does those families pay too little?

[Anonymous]

Anonymous wrote:I keep hearing that I am on the verge of being "rich" because combined, my school teacher husband and I are on the verge of making $250K. Why don't I feel rich?

I'll take a wild guess : you have never been to the 3rd world ( beach vacation in the DR does NOT count)

[Anonymous]

Anonymous wrote:I think we are missing pat of the point here.... The politicians say we need to raise taxes on the "rich" because they do not pay ENOUGH taxes. That somehow they take advantage of the system with all the deductions so that they pay little. The mitt Romney example. Or, that they need to pay more of their share. But for those in high cola areas where 250k does not necessarily allow you to accumulate lots of low taxed wealth, does those families pay too little?

What is your mortgage,your cost of school, and your college debt?

[Anonymous]

I'm a writer and a few years ago did a whole series on how much $ it takes for people to *feel* wealthy, regardless of the numbers.

What I found, unsurprisingly: basically, most people don't feel wealthy, no matter how much $ they have. That's largely because people generally evaluate themselves against people who have more than they do, rather than people who have less. Also, people are very aware of what they don't have and tend not to be so conscious of what they do have.

People who do feel wealthy tended, I found, to be people who made a conscious decision to have an unusual relationship with money. People who'd suffered difficult circumstances at some point in their lives, and then later chose to make radical changes in their lives. There seemed to be a relationship between the act of choosing a particular life and the feeling of having enough.

Here's a recent study showing that people think they would feel wealthy if they had twice as much as they now have: http://www.cnbc.com/id/48240956/What_Does_It_Take_to_Feel_Wealthy

So: no sense beating up on people who say they don't feel wealthy, even when they make objectively high amounts of money. It's human.

It's also not very helpful, policy-wise, since the subjective sense of not having enough tends never to go away. Hard to get people who already feel strapped to think they are among the wealthy and can afford to pay more in taxes or take less in benefits. (Not very helpful in the policy sense if you have a liberal agenda, that is. If you are an anti-tax person then this natural human feeling is very helpful, policy-wise.)