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What is Rich?
Author: Raine
Date: 09/13/2010 13:16:01
After a long contentious August and first few weeks of September, Congress returns to DC today. Congress will be battling the contentious *Tax Cut* battle. When I say Tax Cuts, it's really important to stress that this is NOT a tax hike-- as many in the GOP have been trying so hard to get people to believe. Sadly, many do believe this as evidenced by the second annual 9/12 Tea party Taxpayer March that occurred yesterday in DC. As I looked at the pictures, all I could think was that most of the people marching and protesting already HAD tax cuts. Most of those people were marching at the behest of Freedomworks, headed by Dick Armey, who would NOT benefit from the WH plan to keep all the tax cuts except for those earning over 250,000 dollars. It would do well for people to recall that the Original idea of the Tea Party was to protest taxes -- nowadays they just protest EVERYTHING, it seems.
Yesterday, however, I was particularly surprised at Minority Leader Boehner when he said on Face the Nation: Sounds like a good thing to me. I will be honest, I am very skeptical of anything that this man says and does. That isn't my point, though. John Boehner seems to be apologizing in advance to those that earn over 250,000, as though they may suffer. Matthew Yglesias from Think Progress points out something interesting about this $250,000 number: One could argue the definition of *rich* but I would submit that those earning more than 250,000 dollars a years should be able to shoulder far more of the burden than they are now. Ezra Klein from WaPo Writes: I'm not trying to create an eat the rich blog here. I believe that people should be able to earn as much money as they want, but to act as tho lifting the Bush Taxes cuts for only those earning over $250,000 unfairly taxes those that aren't truly economically affluent is disingenuous. New York City, Fairfax County, Va and Orange County, Ca are indeed more expensive to live in than Ohio, and Kansas --there is no debate to that -- but this is still a significant amount of money, and there is nothing wrong with asking people to pay a more fair share of the burden. Right now the middle class is bearing the brunt of this recession. Teapartiers don't seem to realize they are marching for Dick Armies right to pay FAR less proportionately than they in taxes. Everyone seems to want to reduce the deficit, what many don't seem to realize is that a large portion of this deficit was cause by the Bush Tax Cuts. From 2005: 
And then there is this chart:
A couple with 2 children earning $300,000 would be paying only $4,000 more a year. That might mean cutting back, I know, but $4000 is an awful lot more to a family of 4 earning earning $70,000 a year. I suspect a few less dinners out or maybe a few less lattes. As Ezra Klein pointed out, no one forces anyone to move into a house with a 5,000 a month mortgage or buy a car with a $600 dollar a month lease.
What is rich? I don't know, but I do know that $250,000 dollars a year is a lot of money. I suspect even the Tea Partiers would agree with that if they would stop the vitriol and listen to what they have deemed the "liberal Media" for just a few moments.
and 
Raine
Yesterday, however, I was particularly surprised at Minority Leader Boehner when he said on Face the Nation:
"If the only option I have is to vote for those at [$250,000] and below, of course I'm going to do that," Boehner said. "But I'm going to do everything I can to fight to make sure that we extend the current tax rates for all Americans."
One of the craziest notions to take hold in American politics is the idea that in some high-income geographical areas represented by Democrats in Congress, households earning over $250,000 a year aren’t "really" rich.
Jim Himes of Connecticut, for example, claims that this amount of money "does not make you really rich" which Annie Lowrey explains as driven by the fact that "Fairfield County, which Himes represents <...> is one of America’s wealthiest counties." And so it is. But even in the very richest county in the United States of America a household earning $250,000 per year is 226% of the county’s median income. The median household in Himes’ congressional district earns $66,598. In Manhattan it’s similar—$66,525.
In a separate item earlier this week Lowrey made the case for more tax brackets which I think would do a good job of capturing the intuition that there’s a difference between earning $300,000 a year and earning $30 million. But there’s no getting around the fact that people making "only" a couple hundred grand are, in fact, making much more money than most people.
Arguments over income taxes tend to get bogged down in arguments about who is really "rich." And what you hear then is that rich in Ohio and rich in New York City are different. But how different?
According to the Census Bureau, only 6.3 percent of New York City's households pulled in more than $200,000. So if you're a household making $250,000 or more, you're easily in the top 5 percent -- even in New York City.
Now, it's true that those people might not "feel" rich. There's lots of stuff to buy in New York City. It's pretty easy to construct a lifestyle where you spend $250,000 a year. In Columbus, Ohio, only 1.3 percent of households make more than $200,000, so there's less stuff for them to buy and fewer rich people for them to try to keep up with. But what you buy and whether you try to keep up with the people in the penthouse is a personal decision, not an objective economic necessity. The fact of the matter is that a household making $250,000 in New York City is making more than pretty much anyone else in the city. Being rich is more than just a feeling.
And then there is this chart:
A couple with 2 children earning $300,000 would be paying only $4,000 more a year. That might mean cutting back, I know, but $4000 is an awful lot more to a family of 4 earning earning $70,000 a year. I suspect a few less dinners out or maybe a few less lattes. As Ezra Klein pointed out, no one forces anyone to move into a house with a 5,000 a month mortgage or buy a car with a $600 dollar a month lease.
What is rich? I don't know, but I do know that $250,000 dollars a year is a lot of money. I suspect even the Tea Partiers would agree with that if they would stop the vitriol and listen to what they have deemed the "liberal Media" for just a few moments.
and Raine
