Brett Favre’s HouseA story in the print edition of Sports Illustrated on the sale of Brett Favre’s house in Green Bay captured my attention. I can’t find it online but it appears to have taken its cue from an October 2 piece in the Green Bay Press-Gazette.
There’s no “for sale” sign in front of the ranch-style home at 2085 Shady Lane, at the corner of Shady Lane and Morris Avenue, but it’s listed by local real estate agency Micoley and Company for $475,000. The nearly 3,000-square-foot home includes four bedrooms and three baths, according to Micoley’s Web site.
Brown County land records indicate the home’s value at $424,900.
Presumably, there’s a Brett Favre markup. The SI writer makes light of it, noting that it would be great for tailgate parties, shooting Wrangler jeans ads, and so forth.
What caught my attention, though, was the price. Not so long ago, living in small town Alabama, I would have thought, “Wow! Nearly half a mil! Must be sweet to be an NFL quarterback.” Now, living in the D.C. metro area, my reaction was “Geez, you can’t even get a condo for that!”
Judging by the photos and description, this is a nice house but one befitting a middle class family, not a multimillionaire. Let’s just say it’s not going to be on MTV Cribs.
Still, a house like that in D.C.’s Cleveland Park neighborhood would easily go for $2.5 million even in today’s depressed housing market. It’d go for over $2 mil in Alexandria, Falls Church, Bethesda, McClain, or any of the other desirable near-in suburbs, too. You’d have to go well past the exurbs, maybe into West Virginia, to buy a single family home even remotely comparable for $495,000.
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. If you live in Manhattan, it’ll get you a nice apartment.
Which is why Obama’s tax plan at this juncture is a probably a bad idea. We might as well start calling him Barack “Hoover” Obama.
And I’m not joking. Personal Consumption Expenditures (PCE) make up a large chunk of the GDP and has been one of the primary reasons the U.S. has not gone into recession in the past few years. When other components go down, PCE kept things rolling. Now with declining home values, higher unemployment, a roiling stock market, the very real possibility of a recession people are cutting back on PCE. Taxing them will just add insult to injury at precisely the wrong time if you are an interventionist/Keynesian/Fordist type of policy person (Republican or Democrat).
And seriously, Hoover did something similar (actually worse) by raising taxes on all those who made more than $96,000, in today’s dollars in 1932. Brilliant idea during a recession on the cusp of a Depression…raise taxes to try and balance the budget.
Ah, James, you haven’t seen the beauty of the plan. Whatever President Obama proposes won’t make it through the Congress intact. What will make it through the Congress will be a department full of bureaucrats, at suitable compensation, of course, whose job is to determine income multipliers based on location to figure our who is rich and who isn’t. There will also be plenty of room for lobbying on the multiplier. The opportunities are practically endless.
Thank you for re-enforcing my belief in minarchy, and that Obama will be a bad president.
Or course, I live in a blue state with lots of Obama supporters, maybe the L.A. multiplier will be really good for me.
Since our current tax system works this way, with defined tiers and such, clearly Armageddon is near if that top tier is raised.
I don’t see how living in an expensive area lets you off the hook for being called rich. Making 5 times the median income in this country pretty much qualifies you as rich, otherwise the term rich is pretty meaningless. I’m sorry that your neighbors are rich too or richer and your cost of living goes up and all the rest that sucks but your still rich. I really do get the whole cost of living idea…250k still = rich.
2007 median income is 50,233
Now this isn’t to say I think taxing only the rich is a good idea or that tax increases at this time are a good idea….but come on 250k is a shit load of money.
Sure it can’t get you very far in Manhattan, so? Isn’t that largely an exception to the rule, how does one have a progressive tax regime if you don’t put numbers on the table. Are you saying that I should have a section in my tax return based on the average value of homes in my neighborhood or something?
If the cost of living is also 5x, then no you aren’t rich.
If the cost if living is 5x higher, then I live in a rich area still making me rich. I just don’t see as many benefits as I would else where, doesn’t make me not rich.
Bzzt, wrong. The point is that “rich” is a relative concept, not an absolute concept.
Thank the gods you aren’t running for even dog catcher.
5x is a relative concept and not an absolute, and no need to be so rude.
If I live in a area that cost 5 time more than the national average then by relative definition of rich I live in a rich area. The only way I can afford to do this is by being relatively rich, the fact that my neighbors may have more than me doesn’t make me less so.
Let me explain it to you Tad.
You live in Gofer’s Crotch you make $50,000 and live comfortably.
I live in Richville and make $250,000 and live just like the guy in Gofer’s Crotch (you).
If I am “rich” in Richville and live just like you–i.e. same size house, same type of entertainment system, similar cars, and similar wardrobe–then you are rich in Gofer’s Crotch and deserve to have your taxes raised too.
Or to put it another way, if we deflate the currency so everyone is a millionaire, should everyone then have to pay higher taxes? Of course not.
Poverty, rich, and middle class are, generally speaking relative concepts.
Now before some dipshit comes along and says, “But the cost of living in L.A. isn’t 5x the cost of living in Smalltown Kansas…durrrrr I’m stupid,” the point isn’t that the cost of living is indeed 5x, but that different areas have different costs of living.
For example, in 1998 the BLS says that all goods in LA were 2.6% more expensive in LA than in Kansas City. By 2008 that delta increased to slightly over 16%. So not only is it more expensive to live in LA, but the rate at which the costs are rising is higher.
So to use Tad’s $50,000 figure, in LA that would need to be about $58,000. Now if we take and multiply that by 5x we get a new cutoff of $290,000 meaning that the guy making $250,000 is not rich.
Of course, that was his home in Green Bay.
Check out his tiny little cottage in Hattiesburg.
Not that I hold it against the guy, and it is Mississippi so it’s probably not worth much more than this one.
Damn Davebo that is quite a “cottage” as you put it. Although the grass looks a bit unhealthy…but maybe it is just the time of year, IDK.
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?
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.
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.
Well lets try it another way because I really do get your point.
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.
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.
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.
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.
We also want to use the median income, maybe even one that is weighted.
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.
How about poor?
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.
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.
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.
I hate to beat this dead horse yet again but somebody has to. Being “rich” is not about income, it is about assets. You can have absolutely no income and be “rich” or even “extremely rich”. Hell, you could lose money hand over fist all year and still be “rich” and maybe even qualify for one of Senator Obama’s tax rebates if all you are measuring is income.
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
classcaste 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?
One correction, I should have written net worth instead of assets above.
And to bring it full circle imagine Frank Calliendo imitating John Madden saying, “Bret Favre, Bret Favre, Bret Favre.”