Who knows where the number came from, but whenever the subject of extending the Bush tax cuts comes up, the line between the haves and the have-nots seems to be $250,000. If you make more than $250,000 you can afford more taxes is what many politicians on the left apparently believe. Fortunately, President Obama caved to GOP pressure and went along with the tax-cut extension by saying something along the lines of, "when you're in hostage negotiations, it's best to not harm the hostage. In this case the hostage was the American people." Silly illustrations aside, I think he did right by extending the tax cuts to all tax-paying citizens. As a recent Economist article pointed out, Federal Government spending is 24% of GDP and tax receipts are 15% of GDP this year. If you raise taxes on those who make more than $250,000 a year and raise capital gains by 5% to 20%, the extra tax revenue will only cover the deficit for 9 days.When it is put in that perspective, one is left with the feeling that $250,000 is an arbitrary number pulled out of thin air; and those that argue people making more than that are "rich" are promoting class warfare whether they realize it or not.
The following article, "Down and out on $250,000 a year"does an excellent job revealing what a family of four making the magical $250,000 really has left at the end of the year. To control for geographical cost and local tax rate differences, the article models 5 different cities across the nation: Huntington, NY, Plano, TX, Pinecrest, FL, Naperville, IL and Glendale, CA.
The results are shocking, but not surprising.
