Barbara Comstock says $250K is not rich in NoVA (house, job market)

[shamrock847]

Originally Posted by michgc

And as many of us have discussed on here, income isn't the only thing that defines someone as rich. More importantly is the wealth the person has. And the obligations he carries. Does he make $250K but owe $100k in student loans? Is he sending back money to family in a 3rd-world country. Does he have a $10 Mil trust fund to his name? Or is he a person who came from a middle class family, worked hard, took out students loans, and landed a good job? Rich is hard to define.

Since some of you gave me a hard time for taking the quote out of context, my question is, at what threshold would you draw the line to define "the rich" around here if $250K is not it? Would it have to include wealth? And would it be too much of an invasion of privacy to go to that level of detail for a person?

I think you hit the nail on the head. There is no magic number that defines when someone is "rich." Even if we could agree on a definition of what "rich" is, the amount of income or assets to get there would vary depending on a person's age and obligations. $250k/yr might be rich for a single 29 year old finishing their medical residency with no debt, but might not be for a two income family of 5 living in Vienna, trying to save for retirement/college and helping to support an elderly parent.

[shamrock847]

Originally Posted by tysonsengineer

For people making 270-290k you mean? Based on all of your numbers above the person would have to make substantially more for this to apply to them.

I'm not sure I follow where you got $270-$290k from. $166k + $84k = $250k.

The deductions would come out of the $84k making the effective rate lower there. A lot of the common deductions phase out before $250k so they would not have as many deductions as a family actually making $84k would.

The 40% marginal tax rate I used was a blend of the 25% and 28% federal brackets plus VA state taxes plus FICA etc. With two earners they are both going to pay the full FICA etc up to the max on each income. Depending on their deductions, their marginal rate might end up in the high 30s but that will only save them a few thousand, which could be offset by the loss of other deductions such as student loan interest due to their income.

The tax code does not incentivise saving outside of certain defined programs like 401ks.

[seiketsu]

High income is easy to define. It is the top x% of all income-earners in a sample. This can be computed on a national level, state level, city level.

High income is not equal to wealth. Wealth is less easy to define. I define it as not having to rely on an income at all. Your money makes money, and you can live off of that.

Arguing over whether $250k in annual household income is "rich" is a distraction from the question of whether income over $250k should be taxed at a higher rate than the first $250k of income.

I think it should be.

And for every family of four that is struggling to make ends meet on a quarter million dollar salary, there is a family of four living in the same high-cost area making it happen on a fraction of that.

[OrangeFish]

Originally Posted by shamrock847

I think you hit the nail on the head. There is no magic number that defines when someone is "rich." Even if we could agree on a definition of what "rich" is, the amount of income or assets to get there would vary depending on a person's age and obligations. $250k/yr might be rich for a single 29 year old finishing their medical residency with no debt, but might not be for a two income family of 5 living in Vienna, trying to save for retirement/college and helping to support an elderly parent.

Bingo.

We are a two income family of four that spent years (plural) supporting an elderly parent out-of-state and about to have the surviving parent move in with our family. Those costs are on top of child care costs ($1500/month for child expenses? Not around here!) and a mortgage and retirement and healthcare, etc.

[PolandSprings]

I agree, $250,000 is not "rich." But it is enough to be comfortable. There is a difference between "rich" and "comfortable" in my opinion.

[Yankeesfan]

Originally Posted by tysonsengineer

in an era where our country is facing massive deficit, and where that stimulus proved to create no new jobs, we need all hands on deck.

No one wants to grab all our money, this is a matter of returning to a rate 3% higher than we currently have. For a family making 250k this accounts for 600 dollars per family per month, out of an income of 21000 dollars per month.

All of the discussion above is about how expensive this area is. I agree we are turning into Palo Alto and we need to consider WHY the cost is going up here and stop living the status quo of "prohibitive expense planning" which is a whole other discussion and that I have debated on this site with everyone calling me a crack pot. Regardless of all those costs, the $600 per month is not going to make or break anything. You can't on one hand say the government has a spending not a revenue problem, but then for yourself say you have a revenue not a spending problem.

The truth lies in between, both need some austerity, both need some revenue, and both need COMPROMISE AND LESS RHETORIC, and the Norquists and the Reeds of the world need to leave and live in whatever Utopian extremist lands in the world that follow their idealogy and see if their standard of living is better there or here.

TysonsEngineer, excellent, and guess what? You personally can make a voluntary contribution to the federal treasury for the amount you feel undertaxed by and, since you are making so much money, are so much wiser about spending and investing it than everyone else, and feel that everyone around you is way too extravagant but you are not, you can contribute even more! Here's the address:

Gifts to the United States Government: Questions and Answers: Financial Management Service

So please, tell us how big of a check you'll be sending so we can thank you for putting all your wisdom into action. Why don't you start with the $7200 a year you mention above, and then add some extra based on how much smarter you are which leaves you so much more each month?

[spleuchan]

Originally Posted by Yankeesfan

TysonsEngineer, excellent, and guess what? You personally can make a voluntary contribution to the federal treasury for the amount you feel undertaxed by and, since you are making so much money, are so much wiser about spending and investing it than everyone else, and feel that everyone around you is way too extravagant but you are not, you can contribute even more! Here's the address:

Gifts to the United States Government: Questions and Answers: Financial Management Service

So please, tell us how big of a check you'll be sending so we can thank you for putting all your wisdom into action. Why don't you start with the $7200 a year you mention above, and then add some extra based on how much smarter you are which leaves you so much more each month?

Problem is if just one person does it (even Warren Buffett), it won't even make a blip in the deficit. If everyone did, it would make a big difference. Its similar to the politicians against ear marks. If a few congressmen don't take money for projects in their district, doesn't make much of a difference and they lose out. If everyone does it, it is much more significant.

But I think this is going in an off-topic direction to the original post.

[ACWhite]

Tysons, I believe the current proposal would cost your hypothetical family MUCH less.

IIRC, it applies the 3% ONLY to the income OVER $250K in TAXABLE income. So a family with a gross of $280K might have a taxable income (after 401k exclusion, mortgage interest & RE tax deduction, exemptions for children, etc.) of $220K (broad-brush estimate simply to illustrate). They would pay NO additional 3%. A family with a gross of $350K, if they have a taxable income of $270K, they would pay 3% of $20K, or ~$600 more for the entire YEAR, not per month.

[spencgr]

Originally Posted by spleuchan

Problem is if just one person does it (even Warren Buffett), it won't even make a blip in the deficit. If everyone did, it would make a big difference. Its similar to the politicians against ear marks. If a few congressmen don't take money for projects in their district, doesn't make much of a difference and they lose out. If everyone does it, it is much more significant.

But I think this is going in an off-topic direction to the original post.

Sounds like the quintessential "why should I vote? one vote doesn't matter" argument. It all starts with one person; you don't have to wait for an entire country to agree, if you believe in something.

So, I definitely agree. If you fee that, because you are so fortunate, you should pay more taxes, I wholeheartedly encourage you to do so. No one forces you to take any deduction on your taxes. TE, I would totally vote you president of the grassroots "Additional Voluntary Tax Association".

[Yankeesfan]

Originally Posted by spleuchan

Problem is if just one person does it (even Warren Buffett), it won't even make a blip in the deficit. If everyone did, it would make a big difference.

Okay, you can be the second contributor and double the impact of TysonEngineer's contribution. It's called putting your money where your mouth (or your keyboard) is.