I agree with the previous comment: we've cast this conversation incorrectly by confusing "income" and "wealth" with a lot of disengenuity from politicians who know better.

I'm all for progressive taxation and a return to prior Federal tax rates, although I wouldn't mind a nod or two of appreciation that all other taxes--sales, state/local income--are considerably higher over the past decade.

Let's just get the tax rates up already, and let everyone see they will not generate the expected revenue, and we move on to whatever is next. My guess is eventually we have a VAT (value added tax) as taxing income just doesn't solve our problems and voters will not accept substantial cuts in entitlements.

Anonymous wrote:How about this, OP is not rich or wealthy -OP is 'upper middle class'. That is the term I always used. Not really in the middle, but certainly not at that rich level where you have a big house, fancy cars, and not too many cares. Those upper middle class folks (I would put myself in that category) certainly are not struggling and live a comparatively comfortable lifestyle, but are not so wealthy that you can tax them a lot more and not bring them back down into the middle class. that is what is going to happen here. if you increase the tax rate and take away deductions over $250 in high COL areas, you will just bring down more people into middle class. Rich will continue to be rich.
Why not adjust the 250k number for COL?

Because that's still inaccurate. The middle class is from the 25th to 75th percentile, e.g. the middle 50% of the earning population. The upper middle class is roughly the 60-75th percentiles. In the US, median HHI is around $50-60K. In the DC area, median HHI is about 75K in the district and about 90K in the suburbs. The 75th percentile HHI in the nation is probably around 100-125. In the DC area, that's probably about 125-175K. So, upper middle class even in this area would be about 125-175K. 250K is something like the top 5% of even the DC metro area. Yes, there are many thousands who make this, but you are talking thousands of HHI 250K and over in a metro area of millions. There is no way that you can reasonably call the 95th percentile upper middle class even if they don't feel that they have the buying power of the rich. The point is that OP lives in this area and has many, many choices and advantages that 90% of the metro area do not have.

For those people who feel that $250K is "middle class" please stop redefining the term. You can make up new terms to avoid calling yourselves rich, but the fact is that middle class and upper middle class are terms that are defined and trying to expand them to include those who have more does not help those who actually make middle class incomes.

Anonymous wrote:OP here. Yes, I choose to live in this area because my family brought me here from Ohio when I was 16 and I married a fed. There is really no benefit to this area except for my family. And, unlike other professions, I could make the same money elsewhere, but that would mean leaving family and pulling my kids away from their friends.

Instead of exempting those in the 250K bracket from higher marginal taxes in high COL areas, the govt should lower the number in low COL areas. The reason the argument doesn't go over outside DC etc. is because "rich" starts at a lot lower income in low COL areas - and those midwestern rich folks don't even get hit with the AMT! I suppose it is the unfairness of it that gets to me.

And, I grew up in the "lower middle class" where Mom made my clothes and when dad died and she went to work, she was lucky to get a job making 7K/year with benefits. I just thought my 200K would allow us to have/do more and not worry. Guess not.

What is it that want to have or do that you aren't currently doing? Sounds to me like you are focusing on what so many other people have that you don't, instead of the other way around. Try to be happy with what you have, which in comparison to many other Americans is a lot. Based on your original post, it sounds to me like you have a pretty good life.

OP here. Yes, I choose to live in this area because my family brought me here from Ohio when I was 16 and I married a fed. There is really no benefit to this area except for my family. And, unlike other professions, I could make the same money elsewhere, but that would mean leaving family and pulling my kids away from their friends.

Instead of exempting those in the 250K bracket from higher marginal taxes in high COL areas, the govt should lower the number in low COL areas. The reason the argument doesn't go over outside DC etc. is because "rich" starts at a lot lower income in low COL areas - and those midwestern rich folks don't even get hit with the AMT! I suppose it is the unfairness of it that gets to me.

And, I grew up in the "lower middle class" where Mom made my clothes and when dad died and she went to work, she was lucky to get a job making 7K/year with benefits. I just thought my 200K would allow us to have/do more and not worry. Guess not.

Anonymous wrote:How about this, OP is not rich or wealthy -OP is 'upper middle class'. That is the term I always used. Not really in the middle, but certainly not at that rich level where you have a big house, fancy cars, and not too many cares. Those upper middle class folks (I would put myself in that category) certainly are not struggling and live a comparatively comfortable lifestyle, but are not so wealthy that you can tax them a lot more and not bring them back down into the middle class. that is what is going to happen here. if you increase the tax rate and take away deductions over $250 in high COL areas, you will just bring down more people into middle class. Rich will continue to be rich.
Why not adjust the 250k number for COL?

the op chooses to live in a high COL area and enjoy the benefits it brings.

This argument does not go over with 90% of america outside of nyc,dc,la,sf.

How about this, OP is not rich or wealthy -OP is 'upper middle class'. That is the term I always used. Not really in the middle, but certainly not at that rich level where you have a big house, fancy cars, and not too many cares. Those upper middle class folks (I would put myself in that category) certainly are not struggling and live a comparatively comfortable lifestyle, but are not so wealthy that you can tax them a lot more and not bring them back down into the middle class. that is what is going to happen here. if you increase the tax rate and take away deductions over $250 in high COL areas, you will just bring down more people into middle class. Rich will continue to be rich.
Why not adjust the 250k number for COL?

as chris rock said, shaq is rich, nba owners are wealthy.

The OP is definitely rich, but is not wealthy.

Then again, the OP needs to suck it up because he/she can always move to the midwest or deep south for cheaper COL.

You are rich. Plain and simple.

My husband and I make about 110k a year. I am a teacher, he works for an NGO. I feel pretty darn wealthy with our income. Now when I was growing up my mom made about 25k a year. That did not feel rich.

More than 200k? Very wealthy in my eyes.

These discussions quickly get tedious because they address two different questions:

1. Are people making 250,000+ extremely fortunate relative to most people and most Americans, regardless of how much discretionary income they have left over? Yes, obviously.

2. Are most midlife professionals making 250,000+ in high COL areas who have kids and are saving responsibly for retirement/college able to indulge in lots of flashy spending without consequences? No, of course not.

I have to say that misconceptions about #2 are a source of frustration for me, in that I feel I'm always dealing with friends/family in lower COL situations (cheaper city and/or no kids at home) who regard what I see as reasonable and responsible spending choices for our financial circumstances (buying most clothes at Target, not having smartphones, rarely taking vacations, etc.) as evidence of some sort of nutcase extreme frugality/stinginess on my part.

That said, though, I'm also fully aware of #1. As for the Obama tax increases, bring 'em on! I'm well aware that, regardless of whether I'm able to blow a few thousand bucks on clothes or fly the family to Paris or have a $1M house, I'm much better able to absorb a fairly trivial tax increase than the huge majority of Americans.

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 know so many people who make $28, $30, $35 or $40k. Do you want me to feel sorry for YOU?

Anonymous wrote:We are in the same spot, but I feel very wealthy in many ways. I grew up poor in this area. My family members who are still here have at best HHI of $75,000. I'd take my $200k any day. It's all relative. My family is not saving anything for retirement, but I am. My family cannot afford any private schools, but I can. My family cannot afford any international vacations, but I can. I'm not wealthy like Donald Trump, but I am very grateful for the way I get to live.

Agree with this! I see my neighbors and relatives struggling and I know I am rich by comparison. I also get to live in a city I love and go out to dinner and the theater. Pretty nice life! I'll take it.

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?

You are rich. Plain and simple. You make a ton of money. Maybe you are the type of person who is never satisfied with what she has. I'm guessing you wouldn't feel rich if you made $300 or $400 a year. What would make you feel rich?

OP, do you not notice all the homeless people around or the people that work in places like CVS or Starbucks living on a sliver of what you make? How do you not feel rich?

Oh enough already.

Anonymous wrote:

Anonymous wrote:14:41: OK, point taken, your parents are very frugal, and like I assumed have raised you well!
But whatever wealth they have accumulated will pass on to your daughter one day. Can you really say that that is irrelevant? That it is not a comforting thought? Saying that you are not stressed with a salary of $60,000 is not hard, and not the whole picture - someone else with the same salary might feel huge financial stress easily - see age/parents- despite being very frugal. Would you not agree?

Actually, they have suggested, in a not-very subtle way, that they may give all their money to charity. I believe my mother, left to her own devices, would do it. I do not count on money for security. Ever. I just live as if what I have now is what I'll always have.

We lived that way, once. Then my MIL had a stroke, FIL died and my wife "inherited" roughly $500K. Then the market crashed, my MIL is still around a decade later, the money is gone and we're paying out of pocket for her nursing home and trying to put their house on the market for when they kick her off Medicaid.

Plan for the worst, it sounds like you're on the right track though. And make sure they do not give the money away until you bury them. The worst part of our advanced society is seniors will linger into their 90's, it's a fact, painful in many respects, but a fact.