Middle class ? Nothing special about $250k
In the debate over how to close the budget deficit, President Obama talks often about raising taxes on "millionaires and billionaires," but his policy prescription is a bit different. He says that federal income taxes should be increased on families making more than $250,000. That seems to be the threshold. Under $250,000, you're middle class; over it and you're wealthy.
On a Yahoo message board, a poster named Mason, who lives in Manhattan with two young children, said his household income was $262,000. "I understand the need to raise taxes," he wrote, "but I don't understand why people like us are lumped in with millionaires and billionaires."
On one level, Mason is feeling the effects of inflation; $250,000 isn't what it used to be. If Mr. Obama were really trying to return to Mr. Clinton's 1993 levels, he would have to adjust the bracket for inflation, moving it up to about $386,075. In fact, in Mr. Clinton's last year in office, the top bracket had risen to $288,350 from $250,000.
WEEK IN REVIEW
Rich and Sort of Rich
By ANDREW ROSS SORKIN
Published: May 14, 2011
How $250,000 a year become the dividing line between the haves and have-nots.
Do you believe that people making $250,000 should be taxed at the same rate as millionaires and billionaires?
We live in NYC on the lower East side of Manhattan. My wife and I have two small children, 6 months and 2 years old. Last year we earned $262,000, combined.
4 years ago we paid $480,000 for our 2 bedroom, 960sq ft co op. Our mortgage payment with taxes and insurance is $4200 per month. We pay an additional co op fee of $640 per month and another $515 for our parking space.
Our child care expenses are $2400 per month. Car payment, insurances, health insurance, utilities and other expenses add up to another $3000 per month or so. We put aside another $800 per month for our girls education and spend around $1000. per month for food. Our school loans (with a balance of around $140,000) are another $900 per month on an accelerated payment schedule. Since our marriage 6 years ago we have been able to save around $210,000 between saving and 401K plans.
This year, between city, state and federal taxes we paid over $87,000, not counting our contributions to Fica. We both work very hard for our earnings, and we don't live lavishly. I understand the need to raise taxes, but I don't understand why people like us are lumped in with millionaires and billionaires.
We don't have offshore accounts and there are no loopholes for people like us. We only want to provide what is best for our children, and have a decent living when we retire one day. As crazy as it may sound to some of you, if they continue to raise our taxes and take away the mortgage deduction and all other deductions for people at our income level as they they have proposed, I don't know what we will do. We will be hit very hard.
Do you agree with the tax rates that are being proposed for people earning $250,000 per year?