Please but you are wrong. Please see the worksheet below. (Reply #110)

In the discussion thread: $20,833.00 per month???? [View all]

Fri Dec 28, 2012, 06:29 PM

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

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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167 replies	Author	Time	Post
$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

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