Down and Out on $250K/year....

[Anonymous]

Anonymous wrote:$250k probably puts you in the top 10% in just about any hood, except maybe parts of Georgetown and Great Falls. But even there, I suspect you're above the median.

Or is this another, "poor suffering rich people" thread, so we can justify squashing the workplace rights of teachers making $60k a year?

Yeah, those incredibly selfish teachers!

[Anonymous]

"In 2008, the top 1 percent of tax returns paid 38.0 percent of all federal individual income taxes and earned 20.0 percent of adjusted gross income." So the top 1% are already paying way more than their share of taxes, even considering their disproportionate share of the income.

Only in a world where people refer to a flat tax as a "fair tax" with a straight face. In a world populated by, you know - rational people, whe see both the benefits and the necessity of a progressive taxation system, that percentage seems a little low. Especially when you consider that the top 1% had an AGI of over $380,000. That's AGI, not gross. Gross would be well over $400,000.

[Anonymous]

Anonymous wrote:Studies have shown that it's not the "stuff" that makes the biggest difference in quality of life between now and the past generation, it's the big ticket annual items--like health insurance and medical bills. People also had pensions, so they didn't need to sock money away into 401Ks and the like.

Also, in the DC area, the housing bubble really did in middle income families. DC in the 70s and 80s was a much more affordable, far less desirable city to live in.[/quote]

This is a huge part of it. When I was a kid, Bethesda was NOT the place to live. Edgemoor and Kenwood, Westmoreland Hills maybe were nice, but that was pretty much it. The rest was very blue collar/working class, not solid middle class but in a few places. Silver Spring was mostly a 'hood. Potomac out Falls Rd toward Rockville was, in fact, considered Rockville. You will note that the fire station on Falls just before Glen is still bears the name Rockville. Cabin John was considered Rockville (you still see this at the train station). This part of Potomac was a lot more solidly middle class than now. Maybe leaning toward upper middle in a few spots. It was 'old money' in Potomac Falls and out River Rd. but out Falls toward Rockville was just solid middle class doing the jobs that most of us do now. My parents bought their house there in the 1970 for 60K. Take away the housing bubble, the need to entirely save your own retirement and return to the days of traditional insurance plans and costs and we'd be living the same life. Even with the additional cell phones, data plans, gym memberships, and laptops. But the demise of retirement plans, soaring housing costs and exploding health care is killing the economy and means that we must make much more compared to our parents to maintain the same lifestyle, even if we move to a lower cost of living area. If we leveled those factors, then indeed 250K would indeed be truly wealthy.

[Anonymous]

Anonymous wrote:Only in a world where people refer to a flat tax as a "fair tax" with a straight face. In a world populated by, you know - rational people, whe see both the benefits and the necessity of a progressive taxation system, that percentage seems a little low.

Will you be my best friend? I love this response.

[Anonymous]

Anonymous wrote:"In 2008, the top 1 percent of tax returns paid 38.0 percent of all federal individual income taxes and earned 20.0 percent of adjusted gross income." So the top 1% are already paying way more than their share of taxes, even considering their disproportionate share of the income.

Only in a world where people refer to a flat tax as a "fair tax" with a straight face. In a world populated by, you know - rational people, whe see both the benefits and the necessity of a progressive taxation system, that percentage seems a little low. Especially when you consider that the top 1% had an AGI of over $380,000. That's AGI, not gross. Gross would be well over $400,000.

Consider a two-income professional family making $420,000 a year, gross. AGI is $385,000. Mom makes $230,000, Dad makes $190,000. Their total tax burden -federal income, FICA, medicare, state and local, not including property tax - is $123,000. Do you really want Dad to stop working because he only get $67,000 after taxes, not even considering any childcare costs? Seems like a dumb policy to tax this type of family to death.

[Anonymous]

Anonymous wrote:Consider a two-income professional family making $420,000 a year, gross. AGI is $385,000. Mom makes $230,000, Dad makes $190,000. Their total tax burden -federal income, FICA, medicare, state and local, not including property tax - is $123,000. Do you really want Dad to stop working because he only get $67,000 after taxes, not even considering any childcare costs? Seems like a dumb policy to tax this type of family to death.

so you're telling me that a family bringing in nearly $300K after-taxes is just getting by? GIve me a break.

[Anonymous]

Anonymous wrote:"In 2008, the top 1 percent of tax returns paid 38.0 percent of all federal individual income taxes and earned 20.0 percent of adjusted gross income." So the top 1% are already paying way more than their share of taxes, even considering their disproportionate share of the income.

Only in a world where people refer to a flat tax as a "fair tax" with a straight face. In a world populated by, you know - rational people, whe see both the benefits and the necessity of a progressive taxation system, that percentage seems a little low. Especially when you consider that the top 1% had an AGI of over $380,000. That's AGI, not gross. Gross would be well over $400,000.

Tell me which adjustments to income that the typical $380K earner has that are worth "well over" $20K? Educator expenses? Health savings account? Moving expenses? 1/2 self employment tax? Self employed SEP? Self employed insurance? Penalty on early withdrawal of savings? Alimony paid?

Seriously most people at that level don't qualify for any of adjustments that aren't already phased out. I know we don't.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Consider a two-income professional family making $420,000 a year, gross. AGI is $385,000. Mom makes $230,000, Dad makes $190,000. Their total tax burden -federal income, FICA, medicare, state and local, not including property tax - is $123,000. Do you really want Dad to stop working because he only get $67,000 after taxes, not even considering any childcare costs? Seems like a dumb policy to tax this type of family to death.

so you're telling me that a family bringing in nearly $300K after-taxes is just getting by? GIve me a break.

No, that's not my point. You totally missed my argument, which is why would you want to disincentivize someone with a graduate degree from working by taxing him highly, just because he happens to be married to someone who is also a high earner? It's the low incremental value of the second income to the family that I'm highlighting here.

[Anonymous]

Anonymous wrote:

Anonymous wrote:"In 2008, the top 1 percent of tax returns paid 38.0 percent of all federal individual income taxes and earned 20.0 percent of adjusted gross income." So the top 1% are already paying way more than their share of taxes, even considering their disproportionate share of the income.

Only in a world where people refer to a flat tax as a "fair tax" with a straight face. In a world populated by, you know - rational people, whe see both the benefits and the necessity of a progressive taxation system, that percentage seems a little low. Especially when you consider that the top 1% had an AGI of over $380,000. That's AGI, not gross. Gross would be well over $400,000.

Tell me which adjustments to income that the typical $380K earner has that are worth "well over" $20K? Educator expenses? Health savings account? Moving expenses? 1/2 self employment tax? Self employed SEP? Self employed insurance? Penalty on early withdrawal of savings? Alimony paid?

Seriously most people at that level don't qualify for any of adjustments that aren't already phased out. I know we don't.

Ditto.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Consider a two-income professional family making $420,000 a year, gross. AGI is $385,000. Mom makes $230,000, Dad makes $190,000. Their total tax burden -federal income, FICA, medicare, state and local, not including property tax - is $123,000. Do you really want Dad to stop working because he only get $67,000 after taxes, not even considering any childcare costs? Seems like a dumb policy to tax this type of family to death.

so you're telling me that a family bringing in nearly $300K after-taxes is just getting by? GIve me a break.

No, that's not my point. You totally missed my argument, which is why would you want to disincentivize someone with a graduate degree from working by taxing him highly, just because he happens to be married to someone who is also a high earner? It's the low incremental value of the second income to the family that I'm highlighting here.

there are so many other benefits of working, though. Maybe the lower income earner carries the health insurance for the family. Maybe they have a better retirement plan. Taxes are just a piece of the puzzle.

[Anonymous]

Consider a two-income professional family making $420,000 a year, gross. AGI is $385,000. Mom makes $230,000, Dad makes $190,000. Their total tax burden -federal income, FICA, medicare, state and local, not including property tax - is $123,000. Do you really want Dad to stop working because he only get $67,000 after taxes, not even considering any childcare costs? Seems like a dumb policy to tax this type of family to death.

Your math, to be blunt, sucks. It’s the unthinking acceptance of propaganda like this that allows the right wing to thrive and delude the gullible or dim-witted among us.

Under your scenario, the family keeps $297,000 after taxes. Leaving aside the ridiculous notion that the father couldn’t be bothered to work for a measly $67,000 per year (which is considerably more than the median income in the US, by the way), your assertion that Dad will only get $67,000 after taxes assigns the ENTIRE tax burden to him, and assumes Mom’s salary is not taxed AT ALL. I’m pretty sure that’s not how these things work.

Let’s run the numbers if Dad stops working, shall we?

Mom makes $230,000, gross. You assumed an 8.33% reduction from gross to get to AGI – we’ll go with that, leaving her with approximately $210,833 AGI. You assumed a total tax burden of 31.9478% of AGI. because they’ll be in a slightly lower tax bracket, let’s knock that down to 28%. So, Mom will pay $59,033 in total taxes, leaving the family with $151,799 in after tax income. But wait – when Dad was working, they took home $297,000! That’s a difference of more than $145,000 – slightly more than the $67,000 you blithely asserted Dad was making on his $190,000 salary. And that’s not even considering the potential retirement, health care, FSA, etc. benefits Dad may get.

If you’re going to make the “people making $190,000 need a tax incentive to stay in the workplace” argument, please try to come up with some support that isn’t idiotic on it’s face.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:"In 2008, the top 1 percent of tax returns paid 38.0 percent of all federal individual income taxes and earned 20.0 percent of adjusted gross income." So the top 1% are already paying way more than their share of taxes, even considering their disproportionate share of the income.

Only in a world where people refer to a flat tax as a "fair tax" with a straight face. In a world populated by, you know - rational people, whe see both the benefits and the necessity of a progressive taxation system, that percentage seems a little low. Especially when you consider that the top 1% had an AGI of over $380,000. That's AGI, not gross. Gross would be well over $400,000.

Tell me which adjustments to income that the typical $380K earner has that are worth "well over" $20K? Educator expenses? Health savings account? Moving expenses? 1/2 self employment tax? Self employed SEP? Self employed insurance? Penalty on early withdrawal of savings? Alimony paid?

Seriously most people at that level don't qualify for any of adjustments that aren't already phased out. I know we don't.

Ditto.

My AGI adjustment was over $65k, more than 18% of Gross.

[Anonymous]

How, PP?

[Anonymous]

Your math, to be blunt, sucks. It’s the unthinking acceptance of propaganda like this that allows the right wing to thrive and delude the gullible or dim-witted among us.

Under your scenario, the family keeps $297,000 after taxes. Leaving aside the ridiculous notion that the father couldn’t be bothered to work for a measly $67,000 per year (which is considerably more than the median income in the US, by the way), your assertion that Dad will only get $67,000 after taxes assigns the ENTIRE tax burden to him, and assumes Mom’s salary is not taxed AT ALL. I’m pretty sure that’s not how these things work.

Let’s run the numbers if Dad stops working, shall we?

Mom makes $230,000, gross. You assumed an 8.33% reduction from gross to get to AGI – we’ll go with that, leaving her with approximately $210,833 AGI. You assumed a total tax burden of 31.9478% of AGI. because they’ll be in a slightly lower tax bracket, let’s knock that down to 28%. So, Mom will pay $59,033 in total taxes, leaving the family with $151,799 in after tax income. But wait – when Dad was working, they took home $297,000! That’s a difference of more than $145,000 – slightly more than the $67,000 you blithely asserted Dad was making on his $190,000 salary. And that’s not even considering the potential retirement, health care, FSA, etc. benefits Dad may get.

If you’re going to make the “people making $190,000 need a tax incentive to stay in the workplace” argument, please try to come up with some support that isn’t idiotic on it’s face.

Scratch that – the Mom’s sole after tax income is just under $171,000. So the family would take a $126,000 hit if the Dad stopped working.

[Anonymous]

Anonymous wrote:How, PP?

Self employment tax, qualified plans, and health insurance.

And before you say it, yes, not everyone has those AGI deductions at that level. But no one pays taxes on 401(k) contributions, and if you're making that kinda money, you are (or should be) maxign out your contribusion, which is $16,500, plus more if you're in the catch-up phase. That's nearly, or more than, $20,000 right there.