$250k is not rich in NYC
Within President Barack Obama's budget released Monday are proposals to end the 2001 and 2003 tax cuts and limit itemized deductions for households making more than $250,000 a year and individuals making more than $200,000 a year.
Obama has spoken about having the rich pay their fair share, and $250,000 is a lot of money. But to characterize those households that earn that sum as "rich" or middle class depends very much on where they live. Thanks to regional differences on costs, $250,000 does not go so far in places like New York City and Honolulu, compared with cities in Texas or Tennessee.New York
The Council for Community and Economic Research calculates cost of living indexes for U.S. cities based on goods and services bought by households in the top-income quintile, which nationally covers incomes of about $100,000 and above according to U.S. Census data.
What the data show is that the cost of living in Manhattan is 118% higher than the national average. On the other hand, a household in towns like Harlingen, Texas, or Memphis, Tenn., has a cost of living 15% less than the U.S. average.
What the differences do mean is a household earning $250,000 is not nearly as "rich" or has nearly the buying power as a Memphis household bringing home, say, $150,000 a year.
(The C2ER survey doesn't include private school tuition, which recently made headlines in New York by breaking the $40,000 a year ceiling. It also doesn't take into account local taxes, which can be an extremely heavy burden.)
More on middle class.