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Feedback: Your ideas on what rich is
Mmmmmoney. Counting money.
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Next week on Marketplace Money, the show will concentrate on one number: $250,000. It's the current line in the sand in the debate on whether to extend Bush-era tax cuts. An income of $250,000 makes you wealthy, says one side. Oh no it doesn't, says the other.
We'll hear from people like you across the nation on the topic. Some say, "A household of $250,000 is not wealthy." Others say, "Yes, in many places in the country its." What do you think?
We'll also hear from people like Robert Frank, whose book "Richistan" chronicled a dozen or so folks worth millions of dollars who say they don't feel rich.
"I had a couple, they're worth $200 million. They said to me, 'Wow, I love reading that book about those people. I couldn't believe those people in your books.' So the wealthy they don't see themselves as wealthy," says Frank. "There was a billionaire I talked to who said, 'I'm not rich. Now let me tell you about this guy who is rich.' And he genuinely meant it because, again, we're always looking at those above us and comparing ourselves to the people that we'd like to be rather than looking down at the reality."
We want your feedback: What is rich to you? Leave a comment here or at our Facebook page.
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Neither my personal finances nor my small business will be substantially harmed if the tax cuts on income over $250K are reinstated and I support allowing those tax cuts to lapse.
The hysteria and hyperbole about expiring the temporary tax cuts on income OVER $250K seem way out of proportion to the tax bill difference that most people will experience.
My small consulting business sometimes grosses $400K per year, but that’s not my INCOME. My income is what I draw from the business as salary, after I have paid all of the other bills, including medical insurance, travel, subcontractors, marketing, professional development for myself and my partner, computers, office supplies, accountants, telephones, etc. My spouse and I then get deductions from that income for our home and contributions to our retirement accounts. It’s unusual that our income much exceeds $250K. What if it did?
Let’s assume we make $370K this year. The "crushing" taxation that has everyone excited will result in reverting from the current 33% rate to a “pre-Bush†rate of 40% percent for income between $250K and $370K. My math suggests this means we would pay $8400 more in taxes than we would if the tax cuts were extended. If I made $370K this year, I would be pleased to pay $8400 for the privilege.
We don’t mind paying our share. We recognize that someone needs to pay for roads, veterans’ benefits, and education – and we don’t want to run up more of a deficit for our children and grandchildren. A 7% bump seems like a modest increase on the portion of our income over $250K.
I don’t think we should “soak the richâ€. I think everyone should pay a share. I also think that the prosperity that we enjoy in this country, the quality of life and the government that makes it possible isn’t free. I would oppose returning to the 90% rate of legend, but making the top rate 40% is a reasonable idea. I don’t understand what all the fuss is. Roads don’t build themselves. Policemen, emergency workers, teachers and the justice system all must be paid for.
And for what it’s worth, I would suggest that capital gains should be taxed as income. My understanding is that the REALLY rich make their money through capital gains, not taxable “income†like most of the working class. Worrying about a 7% bump in the tax rate for income over $250K seems like a red herring.
When my three children were young, they came home from school with the question,
"Are we rich?" I said we have enough. Families with "enough" have everything they need and some of what they want. Poor is not having the things one needs, rich is having the things one needs AND the things one wants.
Hi, I don't want to get to technical but I'm not sure at what the $250k is being measured. Is it Gross income on a w2, AGI on the tax return, or taxable income. $250k of taxable income is certainly wealthy, perhaps even rich, the other 2 categories may not indiacte substantial wealth.
Bill Gray
I am a retired community college teacher. My state teachers retirement system (a defined benefit plan that lasts for life--I hope) puts about $3,000. in my account every month--after deductions that cover most of my taxes. My little house is paid for, as is my car.
I taught in a low-income community where nearly all of my students worked--often two or even three jobs--at minimum wage or less--without benefits. They worried constantly about possible illness in the family. They had endless problems with extended family living situations--in overcrowded apartments, rented rooms and even garages. They lived with constant fear of crime. When it was cold, they did not turn on the heat. Some saved money by skipping meals. Few could afford auto insurance; an accident was cause for terrible panic. Any unforeseen expense meant dropping out of school.
I don't have to worry constantly. I can eat whenever I want to. My home is private, quiet and comfortable, and when someone knocks I can open the door without fear. When I am ill, I can look for the best doctor. I have a little savings with which I can help my two hard-working children. (As they were growing up, I often reminded them of how rich they were, and I think they benefitted from the reminders.)
Except for the possibillity of very high inflation and/or loss of my health benefits in the future, I FEEL secure. Isn't that what "rich" is all about?
Earning $250,000 a year sounds like a lot to most Americans, but honestly $250k doesn't cover the 'cost of being rich in America' today. I have experienced the 200k level several times; the reality is that at that salary level you don't receive anything like $200,000 to actually spend. Taxes, health insurance, retirement accounts, housing and school expenses quickly consume 80% of the gross amount.
Most people earning 250k salaries are in urban areas with high costs. If there are kids in schools with tuition it is easy to spent everything on schools. If you're working in a place like NYC, you pay taxes to everyone, the city (even if you don't live in NYC), the State of NY, the State of NJ (if you're commuting in from Jersey for example as I and thousands of others do, or the same for Conn.).
The real estate taxes in metro area towns can be easily $20,000 a year, then there's the state income taxes, social security and medicare taxes, and finally the federal income which is receiving all this debate.
If you bought a 'decent' house in a 'decent' neighborhood in a metro area town with good schools, you will easily have a $4,000 monthly payment on the home. Then there's the expenses of commuting, not to mention the time.
Most people earning $250,000 are not corporate big wheels, they are guys doing well, but they don't exactly own the company, and consequently they put in long days, with a lot of competition. Most at this pay level are saving for retirement in a serious way. Paying into a retirement account is not frivolous or fun money, and these easily take ten percent or more of income. If this family is taking care of an aging parent, that will easily be the cost of another college tuition. Usually the family earning 250k is supporting kids in school, and aging parents.
I'm sorry a lot of commentators believe 250k is deffintely rich--it DOES sound rich. In my experience guys earning at this level would say they are doing 'well' or 'Ok.' They have to be careful with their money now, and they aspire to some relaxation some time in the future.
For me rich means not having to be careful with your money. Rich means buy what you want when you feel like it, and then after you do that, your accountant still tells you at year end, "Sir, I'm happy to report that you have more money than at the beginning of last year."
Rich people do not worry about casual expenses, they do not have to tend to their difficult responsibilities personally. Rich people have 'staff' (servants, and employees) who take care of their life's difficulties on their behalf. When mom is no longer able to care for herself, a rich son or daughter arranges a five star assisted living or nursing home. It will be beautiful, and Mom will be somewhat more happy. It costs $150,000 a year and up, and a rich guy doesn't worry about that. If one of the kids is 'troubled,' a rich guy sends him to a 'good' private school with counseling; cost $100,000 a year, and ,again, not a problem.
A rich family has at least two homes, and they are fully paid for. They have a beachfront water view or perhaps one has a city scape view from a refined town house. A rich guy has a nice boat, and a good yacht club membership. A rich guy is socially accepted in each of their home communities. Rich people are trustees in more than one nonprofit organization. Rich people have attorney's who are preparing the papers to launch their foundation which will pursue one their personal interests, and exempt the family's estate from taxes. A rich person would like his children to work like they did, but it is comforting to know their foundation will assure that their children and grand children have something worthwhile to do if they find that being a salaried employee is not 'their true passion.' Rich people don't earn salaries.
A rich guy has more than one attorney; one of them is a CPA. They have managed to reduced his effective tax rate to ten percent or less yearly.
A rich guy takes most income in the form of unrealized capitol gains, and only takes home a token salary, like $250,000 (which is Warren Buffett's salary the last I heard-- not that I begrudge Mr. Buffett. Listen to what Warren Buffett says on tax fairness).
I know that for most Americans earning $250k sounds like a dream come true, but in my experience with people at that level it's not a dream life.
Focusing the current tax debate on salary levels is a big mistake; Rich people don't earn salaries, and they never pay 30 percent of their incomes in taxes. Please notice in all this tax debate fuss that no actual rich person is complaining that they are about to be taxed heavily, that's because the 'tax cuts' actually affected no rich people.
This moment is a good opportunity for us, the people, to tell our congress and President that it is time to change our tax system. To honestly base taxes on wealth, not just salary, and to agree that every one, rich, middle and poor has a duty to support our government in a least a basic percentage amount, let's say 10 or 12%.
I think it is wrong for large portions of Americans with lower incomes to be exempted from income tax as is now the case. It is also wrong for the wealthiest Americans to pay much lower percentages of their true income than the taxes that are currently paid by the socalled 'rich' guy fortunate enough to earn $250,000.
I would like to see our leaders stop the political games and have an honest debate together with us watching about what is a fair tax level for every American, and how we could gather that. I also expect our leaders to instruct the tax departments to start giving each of us a detailed receipt that explains by category how our tax payments are being spent.
If I buy $40 of gas, I get a receipt, and I keep track of what I did with that $40. The biggest expense I have; taxes, do not give me a receipt for any of the thousands of dollars I give them yearly. We are all paying a lot in taxes, but none of us are getting a receipt from our towns, our states or our federal government for how our money is spent.
Summing up; $250k is Ok, but not rich. We need tax fairness, and our receipts please. Thank you
Yes, I do think $250K is rich. It's substantially above the median income for the country, for one thing. No is implying that people who earn at that level don't *deserve* to be at that level - but obviously they are better able to contribute to the nation's coffers than others.
I would very much like for you to clarify whether the $250K income refers to taxable income or gross income. There is a huge difference between the two, if you're talking about tax cuts for people earning more than $250K. To get to a taxable income of $250K, you have to be earning a lot more than that, in which case you would be considered "rich." SO, please make the clarification at the start of the program. Thank you.
Could someone please tell me if the $250,000 refers to gross income or taxable income? That is never explained in the discussion on whether taxes will go up for people making over $250K. Taxable income is after deductions, so there is a difference. Also, what percentage of Americans make over $250,000? Thanks.
On a really good year I made $55,0000. No body I know ever made more that $75,000. median income in the US is approx. $45,000. Wikdipedia reports that only 1.93 percent of the population the have incomes of $250,000 or above. This goes to show how out of touch with really the American ruling class is. God help us all, if this is what passes truth in this country.
The $250,000 amount seems reasonable. Why is everyone so obsessed with taxes? You never miss it when it's just taken out and most of the programs your taxes pay for help the entire populace. Yes there is waste, yes there are cheaters, but why don't we start thinking about the "greater good?" If you have enough money to provide your family with the necessities of life (and that does not include a second home), you can afford to pay a bit more in taxes. Lately, our country seems to be full of a lot of very MEAN and SELFISH people.
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