Monday, October 29, 2012

Taxing the "rich" at $250,000

President Obama wants to raise taxes on those making $250,000 or more.  Considering that I recently had a slightly heated discussion with a friend on this issue, I figured I would do some research and used this Wall Street Journal article to gather some information as an exercise.

If your household makes $25,000, you are in the 31%
The poverty level is $23,050 for a family of four in 2012 in the United States.

If your household makes $50,000, you are in the 56%
This is approximately the median income in the United States.  This is also the mean (i.e., average) income of Hispanic/Latino and Black households.

If your household makes $75,000, you are in the 70%
This is approximately the mean income of Asian and white households.

If your household makes $100,000, you are in the 81%
This salary is usually a nice round number for a lot of people. But you're already in the top 80% of households in the US.  Certainly not "rich", but let's call you "comfortable", yes?

If your household makes $150,000, you are in the 89%

If your household makes $200,000, you are in the 94%
Another nice round number.  Now we're talking lawyer and doctor, salaries.

If your household makes $250,000, you are in the 96%
We have reached our magic number.  Think about that: if you're here, you already make more than 96% of your fellow countrymen.  And if you make more than this, then yes, the President wants to raise your taxes on that portion of income that is above this number.  Please go ahead and tell the 96% of the people who make less than you that raising your taxes is unfair.

If your household makes $500,000, you are in the 98%

If your household makes $506,000, you are in the 99%
And here we are with the 1%, who make more than half a million dollars.

I don't know what this exercise proves.  But it does seem to me that if you make a six-figure household income, you are already in the elite and should count yourself as very lucky (even granted that those in the 1% are heads and shoulders ridiculously above everyone else).  I will grant you that 250k is somewhat arbitrary.  Why not 300k?  Or 500k?  But that answer is above my pay grade.

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