Department of Awful Statistics: Down and Out on $250,000 a Year (Why Oh Why Can't We Have a Better Press Corps?)
Karen Hube of the Fiscal Times strikes.
A family making $250K/year is not superrich. But that doesn't make a family earning $250K/year "not rich."
At an income level of $250K/year in America today, a family owes about $65/year in all taxes--federal, state, and local; income, sales, property, and social insurance. Subtract off $1.5K/year for a gold-plated dog and $8.5K/year in "necessary" eating-out and bringing-in and you are down to $175K/year. Take off another $75K/year in savings (paydown of real mortgage principal and student loans, 401(k)s, and a college fund) and you are down to living on $25K/year per capita in consumption expenditures.
Only rich families in America today live in detached houses with spare bedrooms in high-tax high-cost areas (and get the services and amenities those buy), spend $36K/year on mortgage payments, $4K/year on clothes and dry cleaning, $8.5K/year on eating-out and bringing-in, $3K/year on gifts and holidays, $20K/year on daycare, babysitting, and summer camps--and still save $75K/year. That is what rich families in America do: that is how they spend their money. The fact that after they have spent their money and paid their taxes there is only $75K/year left for savings is not a sign that they are not rich.
Karen Hube:
Down and Out on $250,000 a Year - TheFiscalTimes.com: [H]ow flush is a family of four with a $250,000 income?... It’s not exactly easy street... they end up in the red.... After covering taxes and only essential expenses for housing, groceries, child care, clothing, transportation... in common additional expenses for a working couple with two children – music lessons, day camp costs, and after school sports, entertainment, cleaning services, gifts, and a annual week-long vacation – the Joneses get deep in the red in Huntington to the tune of $23,178....
Some of the expenses incurred by couples like the Joneses may seem lavish – such as $5,000 on a housecleaner, a $1,200 annual dry cleaning tab and $4,000 on kids’ activities. But when both parents are working, it is impossible for them to maintain the home, care for the kids and dress for their professional jobs without a big outlay....
For folks like the Joneses who live in high tax, high cost areas, who save for retirement and college, pay for child care to enable two incomes, and pay higher prices for housing in top school districts ─ $250,000 does not a rich family make.
Why oh why can't we have a better press corps?
