The information in this post is from late August of last year. In other words, before the election. However, the issue is still being hotly debated, so this may be even more germane than it was back then.
The question concerns who should be defined as “rich”. Our President says any couple making $250,000.00 or more annually falls into that category. Fortunately (or not, depending on your point of view) our income is so far below these lofty heights that the question is academic for our family.
However, that doesn’t mean it’s not a compelling question for many others, people with mortgages, debt, or children in college. From CNBC’s site “By the Numbers”:
Barack Obama wants to raise taxes on Americans making over $250,000 per year. That may seem like a lot of money, but it depends a lot on where you live.
Someone with an income of $250,000 in Paducah, Ky., for instance, would need to make $586,000 in New York City to maintain the same lifestyle. So, maybe Uncle Sam needs to work in a cost-of-living component to the tax code.
Using a cost of living calculator from Bankrate.com, we compared what $250,000 translates to in various parts of the country. Here’s is a sample of what we found…
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Theoretically, the idea of pulling up stakes and moving some place cheaper might sound like a good solution. But dislocation is hard on families and it takes several years to establish again a “sense of place”, the feeling that one belongs. And to have to do so simply because of an onerous tax burden will substantially increase the resentment level in this country.
What if you love where you live, despite the expensive housing and cost of living? What if you can’t leave because you have no sure job offer elsewhere, yet you feel you’re stuck in a situation where you’re in over your head, past the limit where you can survive financially? How do you survive yet another new tax burden?
Some people have said they’ll make sure their income is just under the limit. In other words, our national productivity will decline just in order to meet an arbitrary line drawn in the sand.
It is indeed “the economy stupid”. In fact, the ignorance surrounding the economic novelties coming out of our new administration is sad evidence of a lack in understanding basic market principles.
That’s what we get when lawyers and politicians are in charge. An economy stuck on stupid.