11/19/2010 6:01 PM ET|
Does $250,000 mean you're rich?
President Obama wants to let the Bush tax cuts expire for households earning $250,000 or more a year. Is that the income level where 'rich' really begins?
If and when our daughter asks me if we're rich, I plan to tell her yes.
We're rich in all the things that matter: good health, happy relationships with family and friends, work we enjoy.
But we're also pretty rich in the purely financial sense.
We have a nice home in a good school district, two paid-for cars, health insurance and growing retirement accounts.
When I was a kid, those were trappings of the middle class.
These days, they're not a given.
We can swing all this, plus a nice annual vacation, a part-time nanny for our daughter and an every-other-week housekeeper, because we're among the 3% of households in the U.S. that our president thinks should pay more taxes.
If the Bush-era tax cuts expire or are extended, as President Barack Obama originally proposed, only to singles who make less than $200,000 and married couples making less than $250,000, then our family's tax bill would rise by more than $6,500 next year, according to the Tax Policy Center's handy calculator.
We already pay a lot in taxes.
Last year, our federal income tax bill was 21% of our total income, which is a bit above the 19.6% others in our income bracket paid in 2007, the most recent year for which the Internal Revenue Service has detailed statistics.
It's also well above the average federal tax rate most Americans pay, which ranges from 4% to 9%.
Add in state income taxes plus Social Security and Medicare taxes, and more than one-third of our income goes to the government.
In fact, we taxpayers in the $200,000 to $500,000 income bracket pay a whole lot of taxes overall.
There were fewer than 3.5 million of us in 2007, compared with nearly 30 million in the $50,000 to $100,000 category, yet we paid more in total than they did: $196.5 billion, compared with their $190.7 billion.
And we paid more than twice the total chipped in by the 38 million taxpayers who earned less than $50,000.
I certainly don't want to pay thousands of dollars more.
But saying we can't afford it, as some in our bracket have, is wrong -- and remarkably tone-deaf, given how many people are struggling.
Fifteen percent of American families had trouble feeding themselves last year, for heaven's sake.
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