General Discussion

Luminous Animal

(27,310 posts)

110. Please but you are wrong. Please see the worksheet below.

Fri Dec 28, 2012, 06:29 PM

Dec 2012

The three scenarios presented below include incomes that would all fall into the 25% bracket on ordinary income. None actually pay 25%. The highest in that bracket comes close when adding SS and MED FICA but considering federal income taxes alone, the lowest will end up paying 11% federal income taxes and the highest will end up paying 18% federal income taxes. (The percentage tax computation chart that I used comes from the IRS 1040 handbook.)

This pattern holds true for every bracket. The lowest ordinary income in a bracket will pay a smaller percentage of federal income tax than the highest income in the same bracket.

What skews the percentage for the wealthy is that they rarely take the standard deductions because their mortgage, property tax, and charitable contributions combined will be much huger than the standard. Also, long term capital gains are taxed at 15% and the wealthy can take advantage off off-shore tax shelters. And keep in mind that SS FICA is only assessed on the first $106,000 in income.

That is why people like Mitt Romney and Warren Buffet are able to pay a lower percentage of their income than someone in the 25% tax bracket.

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$20,833.00 per month???? [View all] Heather MC Dec 2012 OP

I really have no idea. With two grad degrees I'd need three jobs to hit 250K NYC_SKP Dec 2012 #1

I know people who make 250,000K per year, they live on golf courses with elevators Heather MC Dec 2012 #6

It really depends where in the country they are taught_me_patience Dec 2012 #18

Then you are doing something wrong and you are decidedly NOT middle class... Luminous Animal Dec 2012 #23

In one of those cities an experienced firefighter and a nurse, pnwmom Dec 2012 #74

They might consider themselves middle class but they'd be in the 20% of the SF population Luminous Animal Dec 2012 #75

"Class" isn't a term strictly related to income, IMO. People who have an income in that range pnwmom Dec 2012 #101

Upper Middle Class, perhaps, with that as a family income in a high cost city Tom Rinaldo Dec 2012 #87

I agree. We shouldn't be making cuts that hurt people on the other end. n/t pnwmom Dec 2012 #96

Subaru and BMW are high-end cars intheflow Dec 2012 #65

Subarus are high end cars? It depends. I live in Subaru-ville where yes, there are new ones uppityperson Dec 2012 #70

This message was self-deleted by its author intheflow Dec 2012 #88

Subaru? lumberjack_jeff Dec 2012 #95

W WA, we have our Subaru subculture, don't we? If not a volvo, a subaru. uppityperson Dec 2012 #105

I was looking for an older model Honda nolabels Dec 2012 #107

I am on my 3rd Subaru. pangaia Dec 2012 #154

irregardless is not a word datasuspect Dec 2012 #89

Meh. intheflow Dec 2012 #90

it's a free country datasuspect Dec 2012 #91

I'll consider myself courteously warned, then. intheflow Dec 2012 #108

It's a shame, too, because Beemers are pieces of crap. Fawke Em Dec 2012 #102

yes - solid upper middle class taught_me_patience Dec 2012 #121

professional class - accountants, physicians, engineers, geologists, elehhhhna Dec 2012 #10

Do you have any data? Two income households. DINKS. I'm single... I'd need two times the income. NYC_SKP Dec 2012 #11

I have a phd and a great job... a la izquierda Dec 2012 #2

My DH has a Masters Degree a full time job in the Military and several part time jobs one as a Heather MC Dec 2012 #4

$20,833.00 per month!!! my gosh trueblue2007 Dec 2012 #3

The 2003 Median Income of US households was $45,000. Coyotl Dec 2012 #52

It's interesting how there's a dip in the 75 - 100k range CJCRANE Dec 2012 #80

This chart shows where the middle class ends with that dip, in my view. Coyotl Dec 2012 #86

I get $18000 a year on SS and we hear the chained CPI is not doc03 Dec 2012 #53

Who said that? Nt abelenkpe Dec 2012 #5

Obama and Boehner are going back and forth between 250,000 and 1 million as the cutcoff point robinlynne Dec 2012 #9

Crummy bargain. We really need to win back the house. nt abelenkpe Dec 2012 #106

that's a lot of money, imo shanti Dec 2012 #7

at least the tribe shares the money with its roll members lunasun Dec 2012 #15

I'm with you. robinlynne Dec 2012 #8

they've settled on $400,000? hfojvt Dec 2012 #12

Only $16,666.00 per month, that's pennies how could anyone live off less than $16,666 per month? Heather MC Dec 2012 #13

$200k is not much in expensive cities like NYC or Los Angeles taught_me_patience Dec 2012 #17

That's the rich people's way of saying "get lost". It does not mean it isn't plenty of money. JVS Dec 2012 #27

I live in NYC jade3000 Dec 2012 #31

That is not what that person said. nt stevenleser Dec 2012 #112

The highest average income (by area) per household in LA is $141,000.... Luminous Animal Dec 2012 #33

the median income is $79,100 (from your 2nd link) hfojvt Dec 2012 #72

that;s Crap, most people in NYC and LA don't have anything close to 200k, it IS enough JI7 Dec 2012 #36

It's true that you can't be a yuppie at less than those prices... Lydia Leftcoast Dec 2012 #49

Sure you can. Most professions make less than $250K/yr. Nurses, IT, Accountants, etc make less. stevenleser Dec 2012 #147

Hahahaha. ForgoTheConsequence Dec 2012 #55

I'm going to say it. Occulus Dec 2012 #60

I made half that in LA and retired in 15 years. What I didn't do was pretend Egalitarian Thug Dec 2012 #78

Sure it is. quakerboy Dec 2012 #84

Suitcases and U-hauls are cheap. n/t lumberjack_jeff Dec 2012 #94

Exactly. I hate when people that live in inexpensive locations attempt to make values bluestate10 Dec 2012 #149

And the proposed increase in taxes is levied on taxable income (after deductions and execemptions) Luminous Animal Dec 2012 #14

exactly so really for 250k it's about at 300k, and or 400k it's really 450K Heather MC Dec 2012 #21

Great thread. Demo_Chris Dec 2012 #16

I love it when people making that much try to act like they're struggling RedCappedBandit Dec 2012 #19

They are just broke at another level Heather MC Dec 2012 #28

By definition, middle class means you are NOT struggling. Obviously at the high end of that you stevenleser Dec 2012 #115

For clarification, my post was definitely not directed at any particular DUer RedCappedBandit Dec 2012 #117

20k gets burned up real fast in expensive cities and high tax states taught_me_patience Dec 2012 #20

I live in the real world, I live in a very expensive area. I know the numbers thanks Heather MC Dec 2012 #22

Yep. I live in San Francisco and most of the people I know make between $50,000 - $80,000 Luminous Animal Dec 2012 #25

$80,000 in income, and they can only manage? So $80k in San Fran isn't very much? Honeycombe8 Dec 2012 #40

I'd say $50K is working class. Rent for a 2 bedroom apartment is over $3000 a month. Luminous Animal Dec 2012 #51

Well, you're the one who stated 250k households live on golf courses taught_me_patience Dec 2012 #26

I said I know people there's a difference in making up something and knowing facts Heather MC Dec 2012 #38

I know a few areas with nice homes on nice golf courses, with home costs in the mid to high $200s. Incitatus Dec 2012 #45

Sorry, but if you can't scrape by on $5000 per week, then you're an absolute failure Orrex Dec 2012 #50

I didn't say you can't make it taught_me_patience Dec 2012 #109

Depends on one's perspective, I suppose Orrex Dec 2012 #126

You are attacking a point that no one made. nt stevenleser Dec 2012 #116

I was addressing reply #20 Orrex Dec 2012 #125

No, it hasnt, as the poster of #20 explained. No one is saying they cant make it on $250K/yr stevenleser Dec 2012 #127

kind of the same point, then Orrex Dec 2012 #130

Its not the same point at all. I think $250K/yr is definitely middle class as I noted in this post.. stevenleser Dec 2012 #141

I have a suggestion: cut the $250K person's annual income by $200K Orrex Dec 2012 #143

You keep creating straw men and are deluded into thinking that they are logical points. They are not stevenleser Dec 2012 #145

No, you're offering up a comparison that has no meaning Orrex Dec 2012 #150

You are now arguing with yourself about your 80% straw man. My comparison is EXACTLY the point stevenleser Dec 2012 #152

Go on with your bad self Orrex Dec 2012 #155

Maybe this will help you understand. stevenleser Dec 2012 #158

You're still arguing that we should subsidize the $250K lifestyle Orrex Dec 2012 #160

No, that is just your latest strawman. I never remotely said any such thing. nt stevenleser Dec 2012 #162

Then answer the question Orrex Dec 2012 #163

"More in common" Chathamization Dec 2012 #156

The bottom threshold for top 1% of wealth is $8.4 million stevenleser Dec 2012 #157

So you're moving the goal posts Chathamization Dec 2012 #165

Sorry, no. Comparison of what is middle class or not IS the goal according to the OP. nt stevenleser Dec 2012 #166

Yes, and comparisons show Chathamization Dec 2012 #167

Yes please. ForgoTheConsequence Dec 2012 #56

Here you go taught_me_patience Dec 2012 #119

First mistake, buying a $1.2M home. Luminous Animal Dec 2012 #128

Looking at this Chathamization Dec 2012 #135

OK .... I would like .... Trajan Dec 2012 #59

... progressoid Dec 2012 #73

good grief treestar Dec 2012 #82

I would like the numbers. quakerboy Dec 2012 #85

see my post #119 taught_me_patience Dec 2012 #120

yes, in Mitt Romney's neighborhood Enrique Dec 2012 #99

It is not the starting point but the end point.... Sekhmets Daughter Dec 2012 #24

The increase is on taxable income after deductions and exemptions. A small business owner with $200K Luminous Animal Dec 2012 #29

No one said he wasn't....n/t Sekhmets Daughter Dec 2012 #30

I wasn't implying that you were but I do question your assertion that 97% of small business owners Luminous Animal Dec 2012 #34

Awkward phrasing on my part.... Sekhmets Daughter Dec 2012 #97

I would call that upper middle class. aikoaiko Dec 2012 #32

Do you need any more proof? kentuck Dec 2012 #35

There's a lower, middle, and upper middle class. Honeycombe8 Dec 2012 #37

This is 250K adjusted Gross Income Heather MC Dec 2012 #42

The tax increase for them is ONLY for the amount OVER that income... Honeycombe8 Dec 2012 #57

Think about it, it is a progressive tax rate and does make sense... Luminous Animal Dec 2012 #67

No, we don't. Maybe that's the basis for the tax rate for a certain income.... Honeycombe8 Dec 2012 #93

Actually, you are wrong. If you fall in the 25% bracket, it means that you earn enough that coalition_unwilling Dec 2012 #103

Please but you are wrong. Please see the worksheet below. Luminous Animal Dec 2012 #110

Your examples prove his point quakerboy Dec 2012 #131

Um no... Luminous Animal Dec 2012 #132

My appologies. quakerboy Dec 2012 #137

No problem :) Luminous Animal Dec 2012 #138

Well, I looked it up, and I was wrong. $250k does seem to be above "middle class" income levels. Honeycombe8 Dec 2012 #61

That is disgusting Fearless Dec 2012 #39

The $250k figure is not the amt cleared. It's the gross income. nt Honeycombe8 Dec 2012 #41

Yes I know. Fearless Dec 2012 #48

Who considers the starting point of middle class to be $250K Incitatus Dec 2012 #43

250K is considered the end of Middle Class and the start of the rich class Heather MC Dec 2012 #44

I think that there's so much dispute here about $250k still being middle class indicates that it is Incitatus Dec 2012 #47

That is not the middle class threshold, it is way above it. Coyotl Dec 2012 #46

It's a system of enforced poverty that was designed that way...... DeSwiss Dec 2012 #54

This all started during the Reagan and then the Bush years...with education cuts. Honeycombe8 Dec 2012 #58

Reagan/Bush was an adjustment. This system goes back much further. n/t DeSwiss Dec 2012 #66

interesting fact. federal education spending was not cut under those guys mostlyconfused Dec 2012 #71

I'm old enuf to remember Bush Sr. cutting college grants. Honeycombe8 Dec 2012 #92

those are in the Dept of Ed budget, and went up under Bush Sr. mostlyconfused Dec 2012 #104

Sorry...you must be wrong. I REMEMBER EXACTLY Bush on tv announcing the CUTS to college grants.... Honeycombe8 Dec 2012 #111

No. What you are suggesting is the Dept of Education's own numbers are wrong mostlyconfused Dec 2012 #136

Because a program is cut does not mean the dollar amount goes down, correct? Honeycombe8 Dec 2012 #140

middle class kardonb Dec 2012 #62

Not really there was no room for extra Heather MC Dec 2012 #68

Top 2% starts at $250,000 ErikJ Dec 2012 #63

Poverty is classified by income, not percent. Whatever percent makes below X amount is considered stevenleser Dec 2012 #114

I haven't seen 20K in the last 5 years combined DotGone Dec 2012 #64

Warped sense of reality. moondust Dec 2012 #69

"Middle Class" is a range that (according to the gov't) tops out at $250M. napi21 Dec 2012 #76

please link some document that says the government has this definition of middle class. FYI: HiPointDem Dec 2012 #77

I think the top quintile is not "middle class." David__77 Dec 2012 #79

Goes to show how few people are really affected treestar Dec 2012 #81

The fair Compromise on the fiscal Cliff Resonance_Chamber Dec 2012 #83

"Middle Income" means something. "Middle Class" is an arbitrary bullshit distinction. lumberjack_jeff Dec 2012 #98

The top 1% are the only ones who have made a killing in the last 30-40 years. And at the expense of stevenleser Dec 2012 #142

2/3 of households who make more than $250,000 a year are 1 percenters. lumberjack_jeff Dec 2012 #151

It's not a percentage/percentile thing, it's a "What is their life like" thing. Thats my point. stevenleser Dec 2012 #153

Almost none... which makes it easy for me to demand more taxes from "them". lumberjack_jeff Dec 2012 #164

Spam deleted by hunter (MIR Team) veterancrozo658 Dec 2012 #100

Household making $250K/yr still has more in common with one making $50K than a 1 percenter household stevenleser Dec 2012 #113

They make in a day, more than I make in a week RedCappedBandit Dec 2012 #118

I think because the Cost of Living in NYC, DC, Chicago is so high... WCGreen Dec 2012 #122

the median income is 80,000 dollars mostly in those cities nowhere near 250 Km uponit7771 Dec 2012 #134

That's the Median which, if I remember my math, is the exact middle point between WCGreen Dec 2012 #139

Upper Middle Class? FreeJoe Dec 2012 #123

Income Averaging FreeJoe Dec 2012 #124

Jesus, I know quite a few people who do not make that a YEAR. MADem Dec 2012 #129

Here is a good quick chart for percentiles... kentuck Dec 2012 #133

Actually, I think it' worse than that... Jeff In Milwaukee Dec 2012 #144

I've Lived in NYC, SF, and Los Angeles Yavin4 Dec 2012 #146

See my #113 nt stevenleser Dec 2012 #148

Yeah, but that's after taxes, and private school, and the vacation fund, and the three car payments killbotfactory Dec 2012 #159

And their dancing horses Orrex Dec 2012 #161