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Can you be middle-class and earn $250,000?

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Sorry, Pal, You're Rich

Can you be middle-class and earn $250,000?

Daniel Gross

Newsweek Web Exclusive

Updated: 7:42 PM ET Aug 27, 2008

Barack Obama's tax plan, laid out by advisers Austan Goolsbee and Jason Furman in the Wall Street Journal in mid-August, promises to improve the nation's fiscal standing by scaling back tax cuts for people making more than $250,000. Since then, the business pundit class has been griping that people who make $250,000 a year aren't really wealthy, especially if they live in and around New York; San Francisco; or Washington, D.C. (Check out this CNBC debate, for example.) On Wednesday afternoon, CNBC's unscientific online poll found that (surprise!) only 35 percent of respondents believed an income of $250,000 qualified a household for elite rich status.

I have two pieces of bad news for the over-$250,000 crowd. First, the reversal of some of the temporary Bush tax cuts is probably inevitable, given the Republican fiscal clown show of the past eight years. Second, I regret to inform you that you are indeed rich.

To a large degree, feeling rich or poor is a state of mind, as John McCain recently noted. "Some people are wealthy and rich in their lives and their children and their ability to educate them. Others are poor if they're billionaires." But income data can surely tell us something. And they tell us that $250,000 puts you in pretty fancy company. The Census Bureau earlier this week reported that the median household income was $50,223 in 2007—up slightly from the last year but still below the 1999 peak. So a household that earned $250,000 made five times the median. In fact, as this chart shows, only 2.245 million U.S. households, the top 1.9 percent, had income greater than $250,000 in 2007. (About 20 percent of households make more than $100,000.)

In dealing with aggregate nationwide numbers, we should of course take account of the significant differences in the cost of living from state to state. It's obvious that $250,000 doesn't go as far in Santa Barbara, Calif., or Manhattan—or in most places where CNBC viewers, employees, and guests live—as it does in Paducah, Ky. As census data show, state median incomes vary from $65,933 in New Jersey to $35,971 in Mississippi. But even in wealthy states, $250,000 ain't bad—it's nearly four times the median income in wealthy states like Maryland and Connecticut. And even if you look at the wealthiest metropolitan areas—Washington, D.C. ($83,200); San Francisco ($73,851); Boston ($68,142); and New York ($61,554)—$250,000 a year dwarfs the median income.

But people in Georgetown mansions don't necessarily compare themselves to fellow Washingtonians in Anacostia. Relative income really works at the neighborhood level. As we know from the work of Cornell economist Robert Frank, people rate their well-being not so much based on how much they make and consume, but on how much they make and consume compared to their neighbors. After all, you have to compete with them for status and for important positional goods such as housing and schools. And here the CNBC crowd has a point. It is certainly true that in a few ZIP codes and neighborhoods, brandishing a $250,000 salary is like bringing a knife to a gunfight. There is a significant number of rich people—including a healthy contingent of filthy rich people—in places like New York City and San Francisco. If you want to live in a neighborhood where starter homes cost $1 million, and you want to send your kids to private schools, and you want to go on great vacations and have a beach house, then $250,000 likely won't cut it. For people in this situation, the knowledge that they're doing better than 98 percent of their fellow Americans is little solace when the investment banker down the street has just pulled down a $2 million bonus.

But the number of places where $250,000 stretches you is small indeed—certain parts of Greenwich, Conn.; several neighborhoods in Manhattan; some of California's coast. Even in the most exclusive communities where the wealthy congregate, $250,000 is still pretty good coin. Consider this: CNNMoney recently ranked America's 25 wealthiest towns. In all of them, someone making $250,000 would have a difficult time buying his dream house. But in all of them, making $250,000 means you're doing better than most of your neighbors. Even in America's richest town, New Canaan, Conn., the median income is $231,138.

I await the tidal wave of e-mails and blog posts from self-made, hardworking, accomplished people who earn $250,000 but who don't feel financially secure and who don't consider themselves rich, especially compared to the venture capitalist next door. Having spent my entire adult life in and around Washington, Boston, and New York, I feel you. I'm eager to listen and empathize. Tell me all about how home prices in areas with good public schools are insanely expensive. Tell me about how many other seemingly undeserving people make so much more. Tell me about your proposals to devise an income tax system that accounts for geographically divergent costs of living (the Alternative Yuppie Tax?). Just don't tell me you're not rich.

http://www.newsweek.com/id/155951


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Testimony to the House Immigration Subcommittee, February 24, 1995

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The Census Bureau earlier this week reported that the median household income was $50,223 in 2007—up slightly from the last year but still below the 1999 peak. So a household that earned $250,000 made five times the median. In fact, as this chart shows, only 2.245 million U.S. households, the top 1.9 percent, had income greater than $250,000 in 2007. (About 20 percent of households make more than $100,000.)

Pretty much sums it up.


Wishing you ten-fold that which you wish upon all others.

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I do think it's a bit inconsistent that it's one figure irregardless of what city you live in.

Perhaps... as in most cases buying power and income allow an earner to invest themselves in ways to deduct themselves out of a good chunk of their tax burdens anyway.

Again... we refer to the actual Census numbers and not the McCain claim that taxes would go up indiscriminately.


Wishing you ten-fold that which you wish upon all others.

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I'd say it depends where you live, actually. You can't make a blanket statement and say, "Someone making such-and-such amount is rich or not." It doesn't work that way.

$250,000 will probably go further in Kansas or Oklahoma versus New York or California. Even then, it'd depend on which city and the area of that particular city as well. Houston, TX is well known for relatively low property values (which makes purchasing large houses an easier prospect than on either coast), but if you decide to live in the upscale neighborhood of River Oaks, you're going to pay through the nose.

How "rich" someone is also depends on how many dependents they have, as well. If they have no children, the money will go a lot farther than if they have three (or more). Does their spouse work or are they a stay-at-home mom/dad? That gets factored into the overall income level as well.

Then there are some luxuries, which, depending on the city, may become a necessity. In Los Angeles or Houston, for instance, you're practically required to have your own car if you wish to get anywhere. Some other cities, such as San Francisco, New York, Philadelphia, Atlanta, and I believe Chicago (although I'm not sure about that one) have decent-to-fantastic public transit systems. Owning a car might not be a requirement there and in some cases (such as in NYC), even a handicap. Internet access has also become a requirement nowadays as well, since so much business is performed online.

Believe it or not, $250,000 is not "rich" by any means. It's certainly not poor, but you won't make it into "America's Top 10 Richest People" either.

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I do think it's a bit inconsistent that it's one figure irregardless of what city you live in.

Irregardless? The debate continues!

Irregardless

From Wikipedia, the free encyclopedia

Irregardless is a term meaning in spite of or anyway, that has caused controversy since it first appeared in the early twentieth century. It is generally listed in dictionaries as "incorrect" or "nonstandard".

* 1 Origin

* 2 Appearance in reference books

* 3 Prescriptive vs. descriptive

* 4 Irregardless in popular culture

* 5 References

Origin

The origin of irregardless is not known for certain, but the consensus among references is that it is a blend of irrespective and regardless, both of which are commonly accepted standard English words. By blending these words, an illogical word is created. "Since the prefix ir- means 'not' (as it does with irrespective), and the suffix -less means 'without,' irregardless is a double negative."[1]

Irregardless is primarily found in North America, most notably in Boston and surrounding areas, where for instance, it was used in the title of a poetry evening 'irregardless of content' at The Baron of Srebrenica, primarily to keep it in circulation. According to the Oxford English Dictionary, Irregardless was first acknowledged in 1912 by the Wentworth American Dialect Dictionary as originating from western Indiana. Barely a decade later, the usage dispute over irregardless was such that, in 1923, Literary Digest published an article titled "Is There Such a Word as Irregardless in the English Language?"[2]

Appearance in reference books

One way to follow the progress of and sentiments toward irregardless is by studying how it is described in references throughout the twentieth century. Webster’s New International Dictionary (2nd. Ed. Unabridged) described the word as an erroneous or humorous form of regardless, and attributed it to the United States. Although irregardless was beginning to make its way into the American lexicon, it still was not universally recognized and was missing completely from Fowler's Modern English Usage,[3] published in 1965, nor is irregardless mentioned under the entry for regardless therein. In the last twenty-five years, irregardless has become a common entry in dictionaries and usage reference books. It appears in a wide range of dictionaries including: Webster's Third New International Dictionary of the English Language Unabridged (1961, repr. 2002),[4] The Barnhart Dictionary of Etymology (1988), The American Heritage Dictionary (Second College Edition, 1991),[5] Microsoft Encarta College Dictionary (2001), and Webster’s New World College Dictionary (Fourth Edition, 2004).[6]

Australian linguist Pam Peters (The Cambridge Guide to English Usage, 2004) suggests that irregardless has become fetishized, since natural examples of this word in corpora of written and spoken English are greatly outnumbered by examples where it is in fact only cited as an incorrect term.

Prescriptive vs. descriptive

The approach taken by lexicographers when documenting a word's uses and limitations can be prescriptive or descriptive. The method used with irregardless is overwhelmingly prescriptive. Much of the criticism comes from the illogical double negative pairing of the prefix (ir-) and suffix (-less), and the argument that irregardless is not, or should not be, a word at all because it lacks the antecedents of a "bona fide nonstandard word." A counterexample is provided in ain't, which has an "ancient genealogy," at which scholars would not dare level such criticisms.[1]

Irregardless in popular culture

* In the Family Guy episode "Lois Kills Stewie" (Part 2), Stewie threatens to consign anyone who uses irregardless to a work camp.

* In a second season episode ("Irregarding Steve") of American Dad, Steve Smith and Roger the alien make fun of Stan Smith when he uses the term. Steve remarks, "Irregardless? That's not even a real word. You're affixing the negative prefix 'ir-' to 'regardless', but, as 'regardless' is already negative, it's a logical absurdity!"

* In the popular movie, Mean Girls, the character Gretchen Wieners uses the word "irregardless" in her first meeting with Lindsay Lohan's character, Cady Heron.

References

1. ^ b Soukhanov, Anne H., ed. The American Heritage Dictionary of the English Language. 3rd Ed. Boston: Houghton Mifflin, 1992.

2. ^ Partridge, Eric, ed. Origins: A Short Etymological Dictionary of Modern English. New York: Macmillan, 1966.

3. ^ Barnhart, Robert K., ed. The Barnhart Dictionary of Etymology. H. W. Wilson Company, 1988.

4. ^ Rooney, Dr. Kathy, ed. Microsoft Encarta College Dictionary. New York: St. Martin's Press, 2001.

5. ^ Murray, James, et al., eds. The Oxford English Dictionary. 2nd Ed. Vol. VIII. Oxford: Oxford University Press, 1989.

6. ^ Fowler, H[enry] W[atson], and Sir Ernest Gowers, eds. Fowler's Modern English Usage. 2nd Ed. New York: Oxford University Press, 1965.

7. ^ Gove, Phillip B., ed. Webster's Third New International Dictionary of the English Language Unabridged. Springfield, Massachusetts: Merriam-Webster, 1981.

8. ^ Berube, Margery S., ed. The American Heritage Dictionary. 2nd College Ed. Boston: Houghton Mifflin, 1991.

9. ^ Agnes, Michael, ed. Webster's New World College Dictionary. 4th Ed. Cleveland, Ohio: Wiley Publishing, 2004.

10. ^ Skeat, W. W., ed. Etymological Dictionary of the English Language. Oxford: Clarendon Press, 1910.

11. ^ Kipfer, Barbara Ann, ed. Roget’s 21st Century Thesaurus. New York: Dell Publishing, 1992.

12. ^ Flerner, Stuart and Jess Stein, eds. The Random House Thesaurus. College Ed. New York: Random House, 1984.

http://en.wikipedia.org/wiki/Irregardless

:jest:

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I'd say it depends where you live, actually. You can't make a blanket statement and say, "Someone making such-and-such amount is rich or not." It doesn't work that way.

$250,000 will probably go further in Kansas or Oklahoma versus New York or California. Even then, it'd depend on which city and the area of that particular city as well. Houston, TX is well known for relatively low property values (which makes purchasing large houses an easier prospect than on either coast), but if you decide to live in the upscale neighborhood of River Oaks, you're going to pay through the nose.

How "rich" someone is also depends on how many dependents they have, as well. If they have no children, the money will go a lot farther than if they have three (or more). Does their spouse work or are they a stay-at-home mom/dad? That gets factored into the overall income level as well.

Then there are some luxuries, which, depending on the city, may become a necessity. In Los Angeles or Houston, for instance, you're practically required to have your own car if you wish to get anywhere. Some other cities, such as San Francisco, New York, Philadelphia, Atlanta, and I believe Chicago (although I'm not sure about that one) have decent-to-fantastic public transit systems. Owning a car might not be a requirement there and in some cases (such as in NYC), even a handicap. Internet access has also become a requirement nowadays as well, since so much business is performed online.

Believe it or not, $250,000 is not "rich" by any means. It's certainly not poor, but you won't make it into "America's Top 10 Richest People" either.

Perhaps not the top 10 people but certainly in the top 2% of America's earners. Not bad... not bad at all.

FYI... Chicago... CTA... barely decent.


Wishing you ten-fold that which you wish upon all others.

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I want to make $250,000. I could care less what class someone tags me under.


Life's just a crazy ride on a run away train

You can't go back for what you've missed

So make it count, hold on tight find a way to make it right

You only get one trip

So make it good, make it last 'cause it all flies by so fast

You only get one trip

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