Taxing the rich - what is the cutoff?

[onlydarksets]

Originally Posted by Schneed10

After going all war-talk in this thread, I'm ready to get back to the topic.

Are you guys kidding in saying that $250K per year is not a good cutoff for higher taxes? This thread title may have been chosen poorly. Obama's $250K cutoff is not designed to define who is "rich."

Feel free to substitute "wealthy" for "rich", but that's a quote from the article.

Originally Posted by Schneed10

To me, you're not rich unless you have assets, excluding your primary residence, totaling $1.0 million or more. "Rich" is a balance sheet definition, not a cash flow definition. In other words, rich is based on what you have, not what you make.

Well said. You've hit on the problem as I see it - people equate $250k/year with being "rich" or "wealthy". That just isn't the case.

Originally Posted by Schneed10

But Obama does not intend to set a cutoff to tax the "rich." He's setting it up to increase revenues from a group that can afford to pay it. I understand the area in which most of us live has a very high cost of living. But if you can't live extremely comfortably in the DC area on $250,000 a year, something is extremely wrong with your budgeting process. That's what Obama's going after, those who can afford to give up 3% of their savings. If people are living paycheck to paycheck on $250K, and can't afford to give up 3% in additional taxes, they need to be smacked upside the friggin head.

I agree. However, it's naive to think that $250k in an area like DC, San Diego, San Francisco, etc. buys you complete economic freedom. I think that is no-question possible at $500k, but I don't exactly have experiential data to prove that.

Originally Posted by Schneed10

To suggest the cutoff needs to be $500K, let alone $750K, makes me question the financial literacy of Americans even more than I already do.

Any cutoff is arbitrary. Why not $225k? Or $300k? Maybe $250k is ridiculous, and it should be $175k? I'm sure they didn't pick that number out of a hat, but I'm equally sure there is no basis to establish $250k as the optimal cutoff.