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This is kind of my point about marginal rates vs cap gains earlier. People like your friend are going to end up being the ones to pay the bill in income tax. We all will on the corporate side through higher prices. But he will get hit in both ways. Meanwhile, the cap gains part vanishes into thin air. And yet another surprise, surprise moment, it won't raise near the revenue it originally projects.
It is, and I've always wanted to know what that max number should be even under a progressive system. I've never heard a politician answer it.
Tim what does 800k buy you for a house in OC? What does 800k buy you in 90% of middle America?
Yep. And I get absolutely crushed at my income level too. Hit with all the taxes but none of the benefits the wealthy are able to use.
Almost nobody spends 800k cash on a house. They put 5% down, sometimes 3% (I heard 1% the other day.)
Tim come on, what kind of house is an 800k house in the OC? You know that's what I meant. Do you really think I meant 800k cash?
If your point is that you can get a much bigger and better house in middle America for 800K you will get no argument.
Fair enough, can't argue with your personal experience. The data just doesn't seem to back it up and based off personal experience, I just have a hard time believing someone isn't living very comfortably or at least have the ability to if they're being financially-smart on a salary of $400k/year.
Ok, fine, but how about all the Swedish fish you can eat during your shift? That has to be like an extra $5 an hour at least....tax free!
I'm wondering why the people who think $400k is anywhere close to middle class have ignored this post.
That's kind of what happened to me. I made enough in 2019 to not get any stimulus, yet my business lost money in 2020. I won't qualify on the tax credit side for 2020 income being down because I had some passive income and cashed out some of my deceased parents IRA's to clear the tax while my rates were lower than normal. I was betting on a tax increase when Biden won the election so I hustled that through at the end of 2020.
It’s part of my overall point. 400k goes far far further some places vs others. Thus changing your lifestyle classification in one place vs another
I know. Because if it's 50%, and they want a new program they don't want to be on record stating what your fair share is so they can move it up to 60%. If it were 60%, the next program might make it need to be 70%. That's why it's repugnant to hear politicians talk about people paying their "fair share" because they are unwilling to define what that is. It allows them to make an endless boogeyman out of someone who is already paying their tax bill.
If by "very comfortable" you mean sitting in your backyard in sunny So-Cal in your 2200sq foot home built in the 90's, in a solid safe public school district, driving a 50k car, and able to save for retirement and kids college while also saving for the yearly trip to Maui. But you still have to keep an eye on your bills, are scrambling if your roof leaks and find out it's a 10/15k repair and will have to work into your mid 60's to retire. Then yes. And for many many that is, it was literally the dream for my parents. But if by "very comfortable" you mean a 5k sq foot house in a private gated community with new cars at will, plenty invested now to not worry about bills or an issue popping up, kids in private schools and retirement or spendy vacation is not a worry. Then no.
I completely agree and view 'very comfortable' much more like your first option, so that might be where we differ if you view it more like the latter.
Nobody disagrees with this overall point. In the middle of Iowa you are living the life on a 400K income. But you also are in the middle of Iowa and not on the beach in So Cal or in the middle of the bustle of NYC. Being wealthy (earning 400K) gets you different things in life. Some may choose the extra space and larger house in middle America. But with that comes less amenities and attractions. Others may choose to be near the big city and restaurants and international airports but you are going to sacrifice space.
Sounds like it. And as I said I love my life and am extremely proud of what I've earned. It's just not "very comfortable" because I know is just a short run of bad luck and I'm wiped out. Very comfortable to me is not having that worry that if you lose your job you can't pay your bills.
I think most people agree with you that 150-250K is upper middle class. These tax proposals don't target that income range though so it is odd we are focussing on that instead of the 400K bracket. Which in my view is a drastic difference.
Very true, but you also making an assumption you have that choice. Many don't. I can't make what I do in Iowa doing what I do.
But it begs the question, why is it kicking in at $400K for a wage earner and $1MM for someone with cap gain income? I guess it's kind of rhetorical, we all know the answer. But because as you say the vast majority of Americans are below that $400K threshold, they won't ask that question. They just know it's someone else's taxes going up. They don't stop to realize that it won't raise the revenue they are told or that the wealthiest earners are getting the better treatment. I don't begrudge anyone who falls in that range, whether that is upper middle class or even lower upper class, whatever we want to call them, for calling that into question.
Goofy thread. I love it. A family making 100k is middle class. 400k is the top of the upper middle class. Upper middle class likely starts around 250k.
Why should the middle class (or any American taxpayer) pay for 86 million to put up illegal immigrants in a hotel?
Ummm really? Pretty sure he was referring to a household income there. Calling that a lie is a stretch.
Pretty hard in my area as Chicagoans are buying up everything, many are for airbnb's.
It is upper-middle in SOCal. SF, and NYC for sure depending on your marital status and dependants.
Okay, but upper-middle class is completely different than middle class... I've already shared this link which shows how off base these claims are, even when factoring in for the major, expensive cities.
I definitely wouldn't be opposed to some kind of cost of living adjustment when determining tax brackets. Unfortunately I'm sure it would be abused and I'm not sure how it could really be implemented well.
Isn’t $400,000 annually $33,333 per month? That’s over 30% more than $25,000 per month. Also, and this is an honest question, are there really states where a paycheck of that amount would have 52% taken out of every paycheck just for state and federal taxes?
Some of these high expense cities have city taxes as well so I wouldn't be surprised if there were some where the top tax bracket got up that high with federal, city, and state combined.
In both of the examples you offered, the answer is because the alternative would cost us more. I happen to agree with that argument; you may not.
From a political standpoint this is exactly what they should do. For all I know it is what they’re going to do; the article in the OP is from the NY Post.
Both 2020 Covid spending packages were bi-partisan. The $6 trillion in new spending is all Democrats.
This can go both ways though right? Dems in minority worked with Reps package. Yet Reps won't return the favor and work with Dems. It's not as simple as looking at vote totals
