Feds Set to Screw the Middle Class Again!

NEW -> Contingent Buyer Assistance Program
For me the point is that making 160,000 is not in any way shape or form 'uber rich'. The problem in our society is the uber rich - the people who are making millions of dollars a year - more money than anyone could ever need. We did not get the stimulus check either - and I do feel grateful that we are making the money we are - however, I know that we are not living any sort of lifestyle in any way that would be considered by US standards rich. I feel the same annoyance I feel when I realized that we would not get to deduct one penny of our student loan interest because of our income - absolutely absurd - we want highly education scientists in our society yet we punish people who go to school and make a good income.
 
<a href="http://quickfacts.census.gov/qfd/states/06/06059.html">If you make 2 1/2 times the median income, I think you're in uber rich territory.</a>



We suffer from lack of persepctive in Orange County. You may not precieve that you are uberrich, but compared to 95% of your fellow US citizens, you are. No offense intended, but the facts disagree with your preception.
 
[quote author="skek" date=1210640704]I'm with you HB Bear, Too -- I don't understand why "fairness" always seems to dictate raising certain people's taxes. All deductions should be eliminated. The top marginal tax rate should be lowered to equal the capital gains rate. Anyone who makes under a certain amount per year should pay nothing, and everyone else should pay somewhere between zero and the top rate. I like the idea of indexing it to zip code. Government needs to live on what they take in. Tax revenues have ballooned over the last decade. There's no reason that we are running a deficit other than the fact that the government can't restrain itself. Balanced budget amendment, anyone? Rep. Campbell of Newport Beach just introduced one.</blockquote>


If I were your "Dear Leader", I'd impose the following tax system:



* Federal income tax will be flat % with most deductions removed.

* Federal minimum wage laws will only apply to District of Columbia (Washington D.C.) and Federal government employees.

* All legal US citizens over the age of 18 will receive $300 per month "citizen's allowance" regardless of income. This sum will be exempted from federal and state income taxes.

* States will retain the rights to levy state income tax, except for the $300/month sum mentioned above.

* States will retain rights to impose minimum wage laws.



I don't believe we should balance payments and taxes by zip code. If certain area becomes too expensive then people should be encouraged (natural economic incentive) to relocate (and repopulate) to cheaper areas. States are supposed to compete against each other for economic opportunities, not maintaining status quo perpetually.



I also don't believe people must work to eat. If you want to live out of a tent (or van, trailer, mountain cabin, cave, etc.) and eat Costco hotdogs, that's fine by me and I have no problems with the government paying for your hotdog, soda, and occasional clothing purchases. You can live in a mountain cabin, be a hermit, take baths in the stream, write poetry, make pottery, art, and collect $300/month in subsidies to eat.
 
[quote author="skek" date=1210731148]If 2.5 times median income is uber rich, what do you call someone who makes $1 mil per year or who has $5 mil in assets and investments?</blockquote>


A 2%er, where 160K is a 5%er.



<blockquote>Just because OCers make more than folks in other parts of the country on average, doesn't mean it translates to actual wealth. We pay a higher tax burden, we have a higher cost of living, and I think most of that extra income evaporates before it becomes disposable.</blockquote>


I would argue that situation exists <em>exactly</em> because we are uber rich here. This ain't a problem in Barstow. There's nothing you can't do in Barstow that happens here.
 
[quote author="skek" date=1210731148]

Just because OCers make more than folks in other parts of the country on average, doesn't mean it translates to actual wealth. We pay a higher tax burden, we have a higher cost of living, and I think most of that extra income evaporates before it becomes disposable.</blockquote>


i'm not sure the inequality problem is as bad as we make it out to be. it's supposed to expensive to live here. if the relative tax burden and cost of living in OCe was the same as everywhere else, then there's no stopping everybody from moving here.



let's say each of us were given an offer for the same job and pay, but relocated out of state where the same income is worth twice as much purchasing power, most of us would probably still choose to stay. so living in a high cost area is really a lifestyle choice. we hate the idea of the govt subsidizing people who bought homes they couldn't afford, but it should be ok to subsidize those who want live in LA/OC as opposed to bakersfield?
 
[quote author="skek" date=1210738285]Nationwide, we worker bees are all the same, and the work we do is the same. Yet, you make X if you work anywhere in the country, you make X+Y if you work in LA, SF or OC, and you make X+Y+Z if you work in NY. </blockquote>


yup i think thats missing piece of the puzzle when people argue the tax burden here is unfair for the OC middle class. i agree that $160k/yr doesnt even get you close to the easy life around here... but i do think people overlook the fact if they moved to the boondogs, even IE, for example, good luck finding jobs that pay several hundred thousand.





<blockquote>

But speaking of uber rich, congrats on finding an empty lot in Shady Canyon to squat in -- I'm jealous of the view from your tent!</blockquote>


thanks! i paid 2.5M for the lot so i only had enough money left over for the tent. a $600 stimulus check would have been really nice -- i was really looking forward to adding a few bedrooms.
 
If I am 'uber rich' then this country is in for a bigger fall than any of us can even imagine - then the lifestyle that we believe (and demand through our litigation) our citizens to live - food on the table, clothes, house, child-care, saving for retirement, health insurance, car insurance, renters/mortgage insurance, preschool for our children, college for our children, etc, etc. will be absolutely destroyed in the future.



And to weigh in the CA issue - I grew up in CA and then lived in a number of different places back east - I have NEVER ever met one person who moved to California simply because it was California. Most people I know who came here came here because there was a job here - reason I am back here. How many people have you really met who came here solely (and I mean completely not job related) because they wanted to live in CA.
 
[quote author="movingaround" date=1210744974]And to weigh in the CA issue - I grew up in CA and then lived in a number of different places back east - I have NEVER ever met one person who moved to California simply because it was California. Most people I know who came here came here because there was a job here - reason I am back here. How many people have you really met who came here solely (and I mean completely not job related) because they wanted to live in CA.</blockquote>


Raises hand. In 2006 I moved to St. Louis, but moved back to the OC after being gone just 18 months. I would rather have a 1200 sq. ft. condo here than a 4000 sq. ft. house there. I would rather pay $4/gallon for gas here than $3.50/gallon there. I know three people who still live in St. Louis who would move here if it wasn't so expensive. You probably aren't seeing the people who haven't moved here because of the cost because they aren't here.
 
If you don't think you are rich, take a look at the <a href="http://www.success-and-culture.net/articles/percapitaincome.shtml">average per capita incomes in the world</a>. The average for the world in 2003 was $8200. The average for the US was $37,500. If you make over $100k, you are rich.



However, I would not categorize you as uber-rich. For that, I look to the <a href="http://www.visualizingeconomics.com/2008/03/30/top-400-taxpayers-income-and-taxes-paid-1992-2005/">top top earners</a>. These are the people that make over $100 million a year. Forget even those that make a measly $1 million or $2 million a year.
 
Sort of my point - Ca is only as appealing as the jobs and the affordability make it - the fact is that very few people will move here 'just because' it is california. Those people you are talking about that may want to move here but haven't simply aren't willing to make the sacrifices needed to live here in California at this point (worse job, smaller home, less money for travel, etc, etc.) - so in your experience that is three (your friends in St. Louis who have not moved) to one (you) - right? :)



Not sure your stage of life but lets make the stakes a bit higher - would you be willing to sacrifice vacations for you and your family in order to live here as opposed to St. Louis - how about sacrificing sending your kids to college, or saving for retirement, ballet lessons/little league, or how about your partner being home with the kids instead of having to work?? These are the reasons that many families I know would never, ever move to CA unless it was necessary career wise.



Now, all that being said I do understand the draw to be near family for people who are from here and have family here - but other than family or job I just have not ever met anyone (until you maybe) that really thought the sacrifice was worth it.
 
Of course, this was all started from the OP's assertion that $90k/$160k was a too stringent cut-off for <strong>"middle class"</strong>.



Instead, s/he suggested $125k/$250k.

<strong>

Is $125k/$250k "middle class" in OC?</strong>
 
I understand that making over 100,000 - and even being able to feed and clothe your family - is very rich by the world standards.



However, there is something wrong when our govt. decides that over 160,000 is not middle class and yet a family that is that 'rich' cannot even afford to buy a fairly average home where they live even though they make double the median income. And yet, the government denies inflation and is trying to prop up housing prices.





It is not the number or even the money that bothers me so much - as it is the extreme lack of understanding by the millionaires that run our govt. as to the financial circumstances that normal people are struggling with. Like $1200 - $2000 dollars is really going to help people with the very serious problems they and our country are facing.
 
[quote author="freedomCM" date=1210752115]Of course, this was all started from the OP's assertion that $90k/$160k was a too stringent cut-off for <strong>"middle class"</strong>.



Instead, s/he suggested $125k/$250k.

<strong>

Is $125k/$250k "middle class" in OC?</strong></blockquote>


It includes the <em>upper-middle class</em>, buy yeah I'd say it's middle class for OC.
 
[quote author="freedomCM" date=1210752115]Of course, this was all started from the OP's assertion that $90k/$160k was a too stringent cut-off for <strong>"middle class"</strong>.



Instead, s/he suggested $125k/$250k.

<strong>

Is $125k/$250k "middle class" in OC?</strong></blockquote>


It seems like it's middle class. The dollar doesn't seem to go very far these days anymore. A few years ago our financial planner ask us to document all our expenses and to come up with a savings plan.



Theses were our typical expense categories for our family of four:



Mortgage

Property Tax

HOA

Homeowners Insurance

Life Insurance

Auto Insurance

Cable/Satellite

Internet

Telephone & Cell Phones

Electric

The Gas Company

Water

Waste Management

Pest Control

Gardener

Auto Loans

Auto Gas

Auto Maintenance

Auto Registration

Eating Out

Entertainment

Groceries

Household stuff (Target / Home Depot)

Clothing and School / Education supplies

College 529 savings

Child Care Expenses

Gym, Sports, Music, and other misc fees

Money to our Parents

and finally... some after-tax savings (not 401k)



Granted, some of these are 'optional' expenses like pest control, gardener, and gym fees, life insurance, 529 plans, etc. but the others are otherwise normal everyday expenses for a family of four. Many of the expenses like insurance, electricity, gas, property tax are higher in SoCal than many of the other states. If you're single, then I'd imagine $160K will go quite a long way, add up food and child care expenses for a family of four (with young children) and $160K definitely feels very middle class.
 
I'm sorry, but 3.5 X the median household income in orange county (only what, $70k?) is not middle class. middle class is 30% - 70% of the median household. I would guesstimate that a household income of $40k to $100k is middle class in OC. (much less nationally)



You all can think that you are not overprivileged upperclass, but if your household income is $250k, you are. <strong>You are in the top 3%.</strong>



<strong>I sometimes wonder what people on IHB have been smoking!</strong>



OK, you aren't Bill Gross. But you are still very wealthy, even by OC standards. (even by Irvine or HB standards)





Reserve the tax break, or whatever largess there is, for the bottom 80%
 
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