About that "poor, poor" family of 4 making $250,000

[maxrandb]

http://voices.washingtonpost.com/ezra-klein/2010/07/research_desk_compares_who_get.html

What a bunch of BS. I can't believe that actually got posted on DU, because I thought the DU folks were smarter than the typical Faux News viewer.

First of all, we have to remember that we are talking about TAXABLE INCOME. I'm sorry, but there is no way a couple with income of 250K, with a $3,000 a month mortgage, plus $66K in combined contributions to 401k's has an "adjusted gross income" anywhere close to $250K

Second, even if that were remotely possible...THERE WOULD BE NO CHANGE IN THEIR MARGINAL TAX RATE UNDER THE PRESIDENTS PROPOSAL. Remember, the net effect for some (but not all!) taxpayers earning $250k or more will be that they'll pay an additional 4% in tax ONLY on the amount that is subject to the maximum rate, i.e. the amount that exceeds approximately $250k. (Actually, the top rate kicks in at $349,000 of taxable income so anyone with taxable income between about $200k and $349k will see NO change in their taxes under his plan!) Easy way to explain this is that if you have 250K in taxable income, you pay the current 35% tax-rate. If you have taxable income of 350K, you would pay the 35% rate on 250K, but the 100K over 250 would be taxed at 39%.

Finally, to determine just how "horrible" this would be for our "poor" family of 4 with taxable income of 250K, we would need to know exactly how much their taxes would increase. IN THIS CASE...THEIR TAXES WOULD INCREASE BY 0.0%!!!!"

But, it would also be important to look at what could possibly be the result of increased revenue to the government as a benefit to this couple.

With increased investment in infrastructure, could they pocket that $5000 a year they pay to "park their cars" and ride high-speed rail to work for just $1000 a year?

With increased investment in education grants and loan subsidies, could they save $1000 in interest a year on student loans?

With fully funded health care for the neediest Americans, could they see their insurance premiums reduced by hundreds of dollars a year?

Would reduced government debt open more lucrative lines of credit to them to actually increase their investment and income?

These are just a few of the things we must consider, before we cry "Boner" tears for this poor family of 4 with taxable income of 250K.

I always like to look at things from my perspective. Without giving away my income, the tax-cut I got under the Bush plan (which since I make no where near 250K a year would be the same under Obama's plan), was the equivalent of an extra 12-pack of "good" beer a week.

If additional government initiatives could save me just a fraction of 1% on the 36K a year I am paying to put my daughter through college, then by all means...I'll gladly give up my extra 12-pack of beer a week.

If better infrastructure could reduce my commute to 20 minutes from 45...then by all means...I'll gladly give up my extra 12-pack of beer a week.

If giving a poor kid a hot lunch and after school activities helps make him a better student and a stronger member of our educated work-force, then by all means...I'll gladly give up my extra 12-pack of beer a week.

If providing some additional unemployment benefits to my neighbor enables him to keep his house, maintaining or increasing my home value, then by all means...I'll gladly give up my extra 12-pack of beer a week.

If providing some after-school activities helps keep kids from stealing by car stereo, then by all means...I'll gladly give up my extra 12-back of beer a week.

Heck, I might even be able to "SQUEEZE BY" on $400 a month for "food not cooked at home", instead of $520, because the only way to feel sorry for the couple making 250K in taxable income, WOULD BE IF WE ALL LIVED IN A VACUUM"

[HopeHoops]

1. "And the Lexus SUV needs new sporty alloy rims..."

Give me a fucking break.

[DCKit]

2. If anything, we should make sure this story is as widely reported as possible.

The families of four, getting by on $20K/yr and food stamps who repeatedly vote (R) need to have this 'tragedy' hammered home hard and often.

[maxrandb]

4. That's not the point

This "story" is nothing but naked propaganda meant to advance the false notion the "taxes are too high".

This may be a fictional story about a fictional couple with fictional "facts", but trust me...it was bought and paid for by folks with "real" money.

It explains how union firefighters are able to actually go in a voting booth and vote "R", and how middle-class America consistently votes against their own best interest.

It's a story designed to make the factory worker, working 60 hours a week for $50K a year, feel that "gee, maybe when I get to where I have taxable income of $250K, I'll get to keep more money". Never mind that he has a 0.02% chance of ever reaching that tax-bracket, this story is there to make him feel "sorry" for this couple.

Notice that we rarely see the profile of the family of 4 with taxable income of $50K, and what their struggles are.

Hell, if this fictional $250K a year family had just one neighbor able to stay in his house because of extended unemployment benefits, they've ALREADY MADE MORE IN THE EQUITY OF THEIR HOME than they ever would under a tax-cut.

What the hell happens to their home value when their neighbors are foreclosed on?

[DCKit]

8. But you don't think that exposing this "story" to people who are living hand-to-mouth...

would help?

[obxhead]

3. Any family of 4 with 250K of income whining can

kiss my ass.

If you make that much and money is tight chances are you need to sell a few toys.

[maxrandb]

6. It's not even that

I have no problem with folks that work hard, earn money, take vacations and have some luxuries in life. That's the American Dream. I don't begrudge them their retirement savings, or vacation, or cars, or cable TV, etc.

BUT, stories like this never mention the collective good of all of our taxes that actually enables this family to be prosporous.

We don't live in a vacuum. This couple benefited from quality education, quality infrastructure, domestic tranquility, peace and justice, and a hell of a lot more THAT WE ALL PAY FOR

[obxhead]

7. agreed.

I don't belittle anyone the money they have earned through hard work.

I belittle rich people crying poverty when they have a huge home, good food, reliable cars, and lots of toys in the garage.

[tblue37]

9. Begrudge. nt

[obxhead]

12. Yes, that would have been a better word. Thanks. nt

[BrklynLiberal]

5. Sadly, the repukes are better at lying than the Dems are at telling the truth.

The repuke message machine is a 21st Century apparatus. The Dems', perhaps 18th Century.

The repuke lies come across better, and more people believe them, than any of the Dem truths.

sad, frustrating, pathetic, scary and sickening.

http://markmaynard.com/?p=7501

<snip>

The best part of the article is the contribution by Thomas Frank, the author of What’s the Matter with Kansas?: How Conservatives Won the Heart of America. Here’s a highlight:

….Right-wing politics has become a vehicle for channelling this popular anger against intellectual snobs. The result is that many of America’s poorest citizens have a deep emotional attachment to a party that serves the interests of its richest.

Thomas Frank says that whatever disadvantaged Americans think they are voting for, they get something quite different:

“You vote to strike a blow against elitism and you receive a social order in which wealth is more concentrated than ever before in our life times, workers have been stripped of power, and CEOs are rewarded in a manner that is beyond imagining… It’s like a French Revolution in reverse in which the workers come pouring down the street screaming more power to the aristocracy.”

As Mr Frank sees it, authenticity has replaced economics as the driving force of modern politics. The authentic politicians are the ones who sound like they are speaking from the gut, not the cerebral cortex. Of course, they might be faking it, but it is no joke to say that in contemporary politics, if you can fake sincerity, you have got it made.

And here, according to the author of the article, is the big takeaway message from all of this… “If people vote against their own interests, it is not because they do not understand what is in their interest or have not yet had it properly explained to them. They do it because they resent having their interests decided for them by politicians who think they know best. There is nothing voters hate more than having things explained to them as though they were idiots. As the saying goes, in politics, when you are explaining, you are losing. And that makes anything as complex or as messy as healthcare reform a very hard sell.”

<snip>

[Nye Bevan]

10. They are *hypothetical*!

Someone made up a story about a fictitious couple who earn $250k and then spend too much. I am not sure why there is so much controversy on DU over a work of fiction.

[taught_me_patience]

11. Here is a real world example

Becuase that post was completely ignorant of costs of living in Los Angeles or New York

Here is a more realistic example of a couple with two kids 3&5 living in a 4bd home in a good school district in LA, but not a really nice area such as Santa Monica or Manhattan Beach. In those areas, the mortgage would be $1.5MM.

Often, with big salaries, comes big expenses.

Gross $250,000

Pre-tax savings $30,000
AGI $220,000
Tax 22% Federal & 8% State $66,000
After Tax Income $154,000

One time/year expenses
Car insurance $2,000
Clothing $1,500
Homeowners Insurance $900
Vacations $4,000

Monthly Income after 1 time expenses $12,133

Mortgage @899,000 $4,826
Property Taxes $885
Maintenance @1% $708
Student Loans (100k @ 80K) $950
Health Insurance $250
Car Loans (2 cars Ford Fusion @20k and Camry @ 24k) $810
Food $1,500
Day Care 1 Kid $1,000
Entertainment/cable/phone $200
Savings for college education $500


Remaining $503