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Earning six figures and just scraping by

Posted Apr 17 2009, 01:10 PM by Kim Peterson
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It's a little hard for me to feel sorry for the people making $400,000 a year and saying they're "barely getting by." Yep, people actually say that in this Wall Street Journal article about the Obama administration's push to raise rates for the highest tax brackets.

The article does focus on a serious issue, but come on, quoting the surgeon's wife who says her 2,500-square-foot home is simply not big enough? She has an Infiniti and a vacation home in Florida, but insists she's "good old middle class."

The question raised is how families making more than $250,000 a year will be affected by proposed tax increases, which aim to increase the upper tax bracket to 36% from 33%. What will happen to people just above that threshold?

"It is a tricky situation in which some Americans find themselves after a long boom: They are by no means struggling, compared with the 98% of Americans who make far less, but depending on where they live and the lifestyle choices they have made, they don't necessarily feel rich, either. Worse, in their view, they are facing the same tax rates as those making millions."

The mayor of San Jose says a family making $250,000 a year can't buy a home in Silicon Valley. Funny, I live in San Jose and know people who do it on less. They're not buying mansions, but they buy.

At any rate, this article is one of the most commented on in the Journal today. Here's what some people are saying about it:

"Try to live as a couple in NY City on $250,000 with two kids. Oxford family HMO is $2,800 PER MONTH; income and payroll taxes take about half off the top with CIty and State, basic housing is $5-7,000 month for 2 bedrooms, food and clothing another 1500 easy without going out."
"There's apparently a level of consumption which people feel entitled to, and it's apparently someone ELSE's fault that they can't consume on the level for which they are accustomed to."
"I think fundamentally there's a fairness issue. The top 10% of earners pay 68% of the taxes and now with the proposed changes this burden potentially increases. These tax cuts on 95% of americans are coming to americans that don't really bear the tax burden to begin with."
"The people in this article clearly could be better managing their money. I make well under 100k every month yet I still manage to save a third of my paycheck everymonth so they could do it if they wanted to."

 

 

Comments

 

I was a single mom with no child support making $9 per hour, receiving state subsidized programs.  I am now a married mother that earns a combined $250,000 a year salary with my husband.  I managed my money well then & I manage it well now. The comments here make me angry because they accuse those that earn good money of having an "entitlement to consumption", or say that, "they're not managing their money well".  It is unfair that those who sacrifice to attend school, get a degree to have a better paying career should pay more in taxes.  It is unfair that those who sacrifice by working 60 hour work weeks and not seeing their families should pay more in taxes.  I have been poor, on WIC, on Medi-Cal, and living on Top Ramen and hot dogs, but I enrolled in the community college part-time through it and got off of all assistance programs in less than a year.  I would've really struggled had I been forced to pay more in taxes when I barely scraped by, BUT it would've been FAIR.  It is not the responsibility of others to be punished due to my shortcomings.  It is not the responsibility of independent hard working people to pay much more in taxes than someone else.  It is not fair that "wealthy" people or corporations can shelter earnings, or claim deductions that help them at tax time.  The taxation system is broken.  A flat tax rate across the board.. 15% for you, 15% for me, 15% for everyone is fair.  Those who make less will of course pay less.  Those who make more will ultimately pay more.  The system and processes would be simple, and would not burden the taxpayer or the state.  And those who accept federal or state assistance should have to work, volunteer locally, or be in school to receive the funds, and should be expected to pay a portion back once they're on their feet.  

Few have less sympathy than those of us that have received none.  For years the lower income classes have made comments about the cost of living not being in match with wages, and we've endlessly been told to "work harder", "Lower our expectations" and "make do with less" added to a list of complaints about our "sense of entitlement."  Now the shoe's on the other foot and suddenly those with far more room in the budget to cut, or far more resources to genereate new income start their whining.

Dear readers whom complain about progressive tax and the Obama tax increase.. You are all greedy, self-serving, unwise idiots... If you did you're homework, you'd know that helping out the bottom 90% isn't giving handouts, it's maintaing stability in our system and in our life. Sure, you can get away with treating them like animals only for so long, then after a century or so you'll have revolution, and then they'll snuff the top 10% out - you included - it's historically proven. Also, don't look at it like you worked hard and thus deserve to be able to earn vast amounts of income and pay the same % back in taxes - YOU DON'T. Listen..., I'm also well into six figures in income and in the top 10% of earners, and I realize we carry the majority of the tax burden for the country (seemingly more than our share), BUT I also realize that we top 10%-ers control about 97% or more of total wealth in this country. THUS, is it too much to ask that we pay 60-70% of the tax burden? NO, it isn't... It's fair. And that's not even considering the fool-hearted tax law that Bush passed that allowed the death-tax to go to zero. I mean, does anyone really think that's fair and/or a sustainable long-term deal for society? Do our children deserve 100% of the savings we worked so hard to put away? (they sure as hell DO NOT - let them keep MOST, but then earn THEIR OWN WAY) I remember when I was younger, I recall tilting toward the Republican manner of thinking. I recall saying, "if I have to work this hard, coming from dirt poor, and choose work my butt off for decades to climb the ladder, then so can anyone - if they're not a bunch of lazy bastards". Well, you know what one of my wisest uncles said? "Not everyone can go to college. If they did, who would dig the ditches...?" Now, this may be simple-minded methodology, but he was dead right..! Not everyone can or should go to college. More often than not, the ones that don't go are caught up in multi-generational situations of poverty, poor upbringing, or other issues that impact their mannerisms, drive, sense of self worth, etc. And, NO, not everyone has the same chances or opportunities in life. And, YES, we do need these folks whom are willing to earn only $20-40K per year busting their butts in a factory, digging ditches, building our roads, etc. THEY ARE THE FABRIC OF OUR SOCIETY. THEY PROVIDE THE VERY FOUNDATION UPON WHICH WE top 10%-ers CAN THRIVE. WE NEED TO KEEP THEM HAPPY, AND THEY DESERVE A HELL OF A LOT MORE RESPECT THAN THEY GET.... So, moral of the story, don't be so damn bitter, don't be so damn greedy, have a little heart for those whom don't have it nearly as good as you... If you do, you'll be supporting a more fair, just, equitable and sustainable socieity. Most of them are not lazy (VERY FEW are), and they work damn hard to make ends meet. So unpinch your butt cheeks and your wallet, open your heart (God help you if you're one of those hipocrits whom go to church and still act this way...), and give back to the society that allowed (and still allows) you to get where you are...!!!!

Carolina,

You should know that a wise thoughtful post such as yours has no place on a site like this. You should be ashamed.

Olddude

I have to say that I agree whole heartedly with Carolina Fairness man.  Coming from a blue collar single parent family, my dad died in an accident when I was a teen. I, like Kathy had to hold a full time job while getting a degree have to say that I resent Kathy's insinuation that I have not worked hard. Having dedicated myself to being a social worker, an undervalued profession in this country, I make far less than $250,000. I have to say that I resent ther insinuatiuon that those of us making far less than that do not work hard or put in long hours. When basic housing in urban areas is far more expensive than the part time minimum wage jobs created durnig the last administration. The situation for the working poor is deperate.  When earnigns of $1,838 monthly puts a famiy of four over the Federal Income Poverty Guidline,  I fear Carolina Fairness man is 100% right and we will be hearing the cry, "off with their heads" sooner rather than later.

Carolina Fairnessman for President 2016.  Thank you for your comments. As someone who is college educated and has worked as many as 3 jobs just to make $40,000 a year (I dare someone to call me lazy to my face) to support myself and my family.  I appreciate your standing up to the self-centered well off in defense of those with less whom more often than not, do not have the means to stand up for themselves.

This is how the Obama tax increases on the so called rich will work out for my family.  We make just above what Obama has determined to be the magic number for being rich, and we own a small business. After some math, we figured out that we will be better off making just a little less money. That means we have to keep our revenue stable, or even cut it just a bit. So the person we hired in September to train because we were growing is going to be laid off. We simply cant afford to grow under his tax burden. We are working on how to build a big spurt of growth that will be sustainable, and that wont have us earning less than we are now, but frankly its going to be difficult.

I hate the idea of this, but how did he not see this coming? If we are laying off one person, how will this affect a company that has more than ten employees? They have to be making the same calculations.

Are we greedy, no. Ten percent of our gross income goes to charity,we try to do more actually, but ten is the minimum. No big McMansion, no escalade, no season tickets, no trips to Malta, or even Florida.

It also means that I give less to charity, to help those that are down and out.

Way to go Obama - at least he was not lying about change. So Alex does't have a job, and a few families get less from us than they used to. At least we will be adequately punished for working hard and succeeding.

The tax this year will only affect the upper 10%, but those in that bracket complain that they are being taxed for being succesful. I disagree.  You are being taxed more because you can, and should be able to afford to pay more in taxes. If you can't then your consumption is out of balance in a big way!

Next, those that make $249k are still successful individuals! Most doctors make less than $250k and I would consider them as a group to be very successful, wouldn't you?

wow,  how much do you make carolina,  i drive a tow truck,  my wife works in a doctors office,  we made 106,000 between the 2 of us,  i work 55-60 hours a week,  my wife works 45-50.  after doing my taxes,  the bottom line is we paid approximately 12000.00 just in federal taxes.  i don't mind paying a percentage,  why can't those who make less pay a percentage.  then they still pay less to use the same items i'm paying more for......schools,  fire, police services to name a few.  the argument the low payed people shouldn't have to pay a Fair share is rediculous,  we don't hold back on services because they don't pay as much.  the guy who makes 50000 and sends his kids to the same school i do,  has the same teachers teaching his kids,  the same policeman are ticketing each of us,  and the fireman put out his fire just like mine......a percentage is FAIR only to the ones who pay less,  but i would still pay it,  if the people making less at least paid SOMETHING! Instead THEY whine that all of us making "so much"  should shoulder the whole burden......obama and his tax ideas are wrong,  so let me get this right,  i should work more, make more,  spend less, paymore taxes.....oh yeah,  i see how that makes sense.....then those who don't work, or pay taxes,  can have a life as grand as mine.....you lazy people are just plain stupid!

Let's back up a sec here. I'm thinking a select few don't quite grasp the concept of percentages. Let's imagine the tax rate -- across the board regardless of income -- is 25%. That does not mean that everyone would pay the same dollar amount. Someone making $20,000 would pay $5,000, while someone else making $100,000 would pay $25,000, and a lucky someone making 400,000 would pay $100,000. Setting a tax rate hike above a specific dollar amount like $250,000 is not exactly fair because, depending on the actual percentages, someone making $250,000 may very well net less after taxes than someone else making $249,000. Here's the math assuming 33 and 36%:

$250,000*36%=$90,000 tax... which leaves $160,000 after taxes.

$249,000*33%=$82,170 tax... which leaves $166,830 after taxes.

The first one makes $1,000 more but ends up with $6,830 less. On what planet is that fair? Personally, I'd be begging my employer for a paycut.

And Carolina, I'd just like to comment on your comment "Do our children deserve 100% of the savings we worked so hard to put away? (they sure as hell DO NOT - let them keep MOST, but then earn THEIR OWN WAY" -- I don't know if our children deserve our savings, but they sure as heck don't deserve our debt, and we're burying them so deep they can't see daylight. And why not give them a leg-up in their struggle to save for retirement? The way we're going, they may very well not get any social security even though they're paying in to benefit their elders today.

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