And to bring it full circle imagine Frank Calliendo imitating John Madden saying, "Bret Favre, Bret Favre, Bret Favre."

I make a nice income now, though like Joe the plumber it isn't $250,000 a year ... yet, as I've built up my company but I haven't always made this much and it could change rather rapidly if the economy tanks. As a result I don't have the assets that I might have if I'd been making all this money for the last 30 years. This is one of the unstated assumptions in the soak the rich tax discussions that I despise the most.

"Rich" people don't worry about finding $25,000 to pay tuition this year. You want to call me "rich" but I am struggling to find that $25,000 to pay tuition right now. I guess I'll struggle a little bit more when I become officially "rich" and subject to even more taxes after the election. And I can't wait until inflation or further executive fiat makes the boundary separating us capitalist exploiters and the rest of hoi polloi drop from $250,000 to $200,000, and then to $150,000, and then to $100,000, etc...

Tell me again why I put in all the hours and took on all the debt and risk to pay tax rebates to people who don't even pay taxes. Can I count on a government program to pay all my debt if my business takes a downturn? Man, do I feel really stupid for staying in my old house and pouring the money into the business now.

Tell me again how I'm just one of life's lucky winners instead of someone who worked hard and took some risks. Do I get any credit for creating jobs the last five years? Will I get blamed for cutting them soon in a downturn?

Tell me again why I took a 50% cut in pay from my defense contractor job to be an entrepreneur five years ago? I'm still substantially upside down if you look at my personal balance sheet given the debt I'm carrying as a result of buying the business and investing more in it each and every year, but that level of finance is apparently too hard for you "eat the rich" types to factor into the discussion. Maybe I was wrong to try and provide a better life for my family if all it gets me is castigated as being part of the problem as the "rich" and ever higher tax bills.

I am sick to death of the attempts to create and enforce a class caste system in this country. Look at the marginal tax rate profiles of the respective candidates and explain to me why it doesn't look like they are building what us business types might call a barrier to entry to make sure those in the middle class stay in their place.

Does freedom mean a damned thing here anymore? Or is it too to be sacrificed on the altar of whatever progressives define justice to mean this week?

I said 250k in any area of the united states is above the standard of rich.

Not necessarily. I know people in my area who make $250K a year (at least in terms of combined incomes) and they are not rich. If my wife and I made $250K a year we'd be considerably better off, but certainly not rich. I'm not even sure we'd move from our crappy little 1,300 square foot house or upgrade either of our cars, and my son would definitely continue to attend public school.

The median is lower

That is the median hourly wage, I'm not sure how that measures up to incomes for managers who might get some income in terms of bonuses. Depends on how BLS calculates things. Also, a weighted median might be helpful here.

We also want to use the median income, maybe even one that is weighted.

The median is lower
On the first line of the table it gives the median and mean hourly wages. 20.51 for median and 26.11 for mean

so 52*40*20.51= 42661

I have no idea if it's weighted I presume not.

Bzzt, wrong. The point is that "rich" is a relative concept, not an absolute concept.

How about poor?

You are, quite simply, wrong. What makes one "rich" in one area does not necessarily make one "rich" in another area.

At no point did I say rich in one area equals rich in all areas. At no point have I said that making 250k in place A as means same quality of life as place B.

I said 250k in any area of the united states is above the standard of rich.

Now I will apologize for this mistake if you can point to one town in the united states where the average income/cost of living/inflation/whatever else makes this statement false. It would only take one.

I agree that rich with x dollars is not the same rich in another area with same x dollars.

Again as I am not 5 I know what cost of living is. I also realize that because cost of living changes my income changes with it as well. So my 50k job here would pay a lot higher in say NYC. Maybe not high enough to equal things out tax wise but then I take a hit for the value of living in NYC. Clearly I value that otherwise I would not have moved there.

I'm rich in income by your tax standards, although at your age of 45 working in government and community organizing you appear to have more money in the bank than I do. What did I do wrong?What is "rich" is, of course, relative. It takes ...

We also want to use the median income, maybe even one that is weighted.

Absolute lines like that are used by those who simply do not understand even rudimentary economics. In economics the most important concepts are almost always stated in terms of relative ratios, not absolutes. You even implicitly accept this when you adjust for inflation.

You are, quite simply, wrong. What makes one "rich" in one area does not necessarily make one "rich" in another area.

Triumph,

Income catagories like low, middle and high income are ranges not points. Hence $250K might be rich in one place, but not so much in another. You are certainly closer, but whether or not one is rich is somewhat of an open question, IMO.

Dude, in the DC metro area, the mean annual wage is $54,000--so unless you have a shitload of investment income, there is no way in hell that $250,000 is "just middle class money"--its upper class money.

Your chart actually makes my case for me. The mean annual salary for "management occupations" is $114k. So, if two average managers are married, their household income is $228k. If one of them is slightly above average, they're at a quarter mil.

These aren't executives we're talking about. Just managers. Almost all the management occupations listed are over $100k, some much more.

I'm saying that there is no place in the united states that making 250k, after all your deductions and what not, doesn't qualify you as rich.

I'm not saying that to be rich you must make 5x the national average, I'm saying that if you make that much your well into the rich category no matter what your cost of living.

Neither of these statements, or previous posts, have anything or are meant to say anything about taxes.

I'm not saying Obama's tax plan is fair.

I will say that I prefer the federal government calling people who make +250k rich, much better than the government getting into the business of making cost of living adjustments. Which is where I presume your 'isn't fair' argument is going.

This, by the way, is one of the key reasons why setting some arbitrary figure, say $250,000, and saying that a family that makes that much a year is “rich” doesn’t make sense. That’s a great living in Green Bay or Birmingham or even Dallas. In Washington or Boston or L.A., though, it’s just middle class money.

Dude, in the DC metro area, the mean annual wage is $54,000--so unless you have a shitload of investment income, there is no way in hell that $250,000 is "just middle class money"--its upper class money.

I think that is pretty much exactly the point though. Contrary to your belief, I get cost of living, as I am not 5 I really do. Cost of living differences does not come close to compensating for making 5 times the national average. If one is to draw a line for 'rich,' 5 times the national income is a pretty good one. And if one is to have a progressive tax code for the whole nation one must draw lines.

No, you don't get it.

Yes, making $250K in LA is better than $50K or even $100K in say Dayton Ohio. My point is that if $250K is your definition of "rich" in Dayton, then you'll need a higher number for "rich" in LA because the cost of living is higher. You are in favor of violating the notion of horizontal equity.

You seem stuck on...well lots of things, but lets try working through it slowly.

Lets say for the sake of simple math the difference in cost of living in Los Angeles and a place like Kansas City is 10%. Thus, in LA $55,000 is equivalent to $50,000 in terms of the standard of living it buys. According to horizontal equity these people should pay approximately similar taxes since they have about the same ability to pay.

The same thing applies for $250,000. In LA though the equivalent to $250,000 is $275,000. Thus, making the person in LA who does make $250,000 pay more is a violation of horizontal equity. It is not fair.

Yes, the person in LA making $250K is better off than the guy in KC making $50 and he should clearly pay more (this is vertical equity), but he shouldn't pay the same as the person making $250K in KC.

Think of it this way. A guy making $250K in KC moves to LA. Now he faces a significantly higher cost of living. Should he pay the same taxes? Horizontal equity says no.

It really is that simple. Obama's plan of using a single line for the entire country is not fair. It violates one of the notions of equity in public finance.

Christ, I can't believe I'm arguing for the point in Dave Schuler's comment.

Note: so far the argument has abstracted the issue of state level taxes which can also affect one's ability to pay Federal taxes and vice-versa.

the point isn't that the cost of living is indeed 5x, but that different areas have different costs of living.

I think that is pretty much exactly the point though. Contrary to your belief, I get cost of living, as I am not 5 I really do. Cost of living differences does not come close to compensating for making 5 times the national average. If one is to draw a line for 'rich,' 5 times the national income is a pretty good one. And if one is to have a progressive tax code for the whole nation one must draw lines.

Unless you know of some town where the average household income for the whole town is 250k?