"who says almost all of her clients are middle class, whether their income is $50,000 or $200,000."
a quote from an MSN story today on how the middle class is getting squeezed.
http://www.msnbc.msn.com/id/21265994/
Last year the median household income was $58,000. Can we really talk about the middle class if we are including folks pulling in $200,000??????? There is an election next year and the candidates are all going to pander to the "middle class" ...... is that YOU?
The problem with "middle class" is that everyone has a different definition.
Politicians use middle class to appeal to the broadest voter base possible. If you have a job (or are retired), you are middle class to them, even if you are collecting EIC. When appealing to voters, they'll use a very broad definition, but when it comes to tax benefits, it's a very, very narrow definition. I cringe everytime I hear congress talking about increasing taxes on the rich and lowering them for everybody else. Invariably I'm not in the else category.
Personally, I envision income as a bell curve and use the old +- 2 standard deviations to decide where I fit. (I also think of the middle three quintiles.) Thus I tag middle class as income between $40,000 and $80,000 a year. Even people who make $200K don't think of themselves as rich (only 2% of the population does).
If you use the Census breakdowns--by family type, then middle 20% and then middle 60%, here's what you get. The census definition of income is fairly good--it includes spendable cash (such as social security payments), but doesn't add in imputed rent (as in what would I pay in rent if I didn't own my home) or EIC. It also excludes capital gains to avoid income spikes.
Table 1. Middle Income Range Varies by Type of HouseholdCalendar Year 2006
>> Personally, I envision income as a bell curve <<
Do you believe that incomes fit a neat, symmetrical, bell curve with so-called "normal distribution?"
You might, indeed, so envision the distribution of incomes, but that does not mean that such a curve accurately describes reality.
Best regards, 4merCL
Probably something like this (I can't draw here....)
xxxx
xxxxxxxxxxxxxxx xx xx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Great chart!
I like to look at that middle 20% column. Low and behold as a tax preparer I can vouch that THESE are the folks the tax deductions and credits etc. were/are aimed at. The sooner the general public realizes it the better. It's very frustrating explaining to clients that they dont qualify for any particular credit due to their income. I urge everyone to print out this chart and refer to it often during the pres. debates!
>> Probably something like this (I can't draw here....) <<
Along which axis have you assumed the independant variable ?
Under the recently vetoed SCHIP bill, a family earning $80,000 a year was considered "poor" enough to qualify under the plan for health insurance coverage for their kids. Apparently that same family is rich enough to be consider "rich" so they will get hit with AMT.
"Foolish consistency is the bugaboo of small minds."
Kurt
> wasnt that vetoed??
Yes. My post started with, "Under the recently vetoed SCHIP bill,..." Bush's veto was upheld this week. The matter will be revisited because the program will expire soon without reauthorization and both sides want it renewed at differing levels of funding and coverage.
Here's an article about what it takes to be "middle class" in San Francisco ... Bay Area Income
>> The Bay Area is by many measures the richest region in the United States. Median household income - the level at which half of households are above and half below - was $62,024 in 2000, the highest in the nation, according to the Census Bureau.
But that means that almost half of all households in the region don't take in what the Budget Project reckons is needed to make ends meet. Those families often must do without some of the things viewed as essential to middle-class life, such as health insurance or a separate bedroom for the kids.
The federal poverty threshold, used by the government to calculate how many of the nation's people are poor, is an income of $20,650 for a family of four. That means basic necessities in the Bay Area cost roughly 2.5 times the federal poverty level.<<
>> As sad as it may seem, people making certain levels of income may do well NOT to live in certain areas of the country, <<
The logical corollary of which is that people living in certain areas of the country may do well not to require services that are compensated at certain levels.
As sad as it may seem, people making certain levels of income may do well NOT to live in certain areas of the country,
That's true. Where salaries are high, housing prices are also high. And we all know that there are some workers who almost never enjoy the high salaries that some segments of the population get.
Works out nicely by itself, though, via the operation of market economics.
That's why some neighborhoods, regions, or evemn whole states have lower costs for housing, food, taxes, clothing, etc. than do others.
The same income that can provide a decent standard of living in Noplace, AK, for example, just won't do it on New York's Park Avenue, Chicago's Lakeshore Drive, or the tonier neighborhoods of Marin County.
Middle class cant be defined by the level of income unless it is done for every city and every state>
For example, if one made 40 -60,000 in Manhattan where flats cost 1 million dollars, you would hardly be middle class, yet you would be if you lived in Jackson, Mississippi, anywhere in Texas or NM etc.
California requires a larger income than 60,000 because we have to pay our state 15% of what we make and over $100 for water each month, and because we have to provide for more illegal aliens than any other state. And of course we have to pay for those illegals who have more kids than Texas citizens in Texas because Texas cant pay for them by itself. So California income taxes have to pay for the people in Texas so illegals can have children.
And of course California gets much less back than we pay to the fed govt. Because our socialist govt believes it has to take from one state to pay for the others! And because Californians love having illegals all over th e country!
To be honest, the middle class we once had is gone! This country is getting more Mexican every day. Mexico has dirt poor and very wealth and nothing in between!
How do you say "Comprehensive Immigration Reform" in your state? We call it #### here in California!
California requires a larger income than 60,000 because we have to pay our state 15% of what we make
Please note: California's top tax rate is 9.3%
Isn't California one of the states that offers in-state tuition rates to illegal residents? And medical care to those? If CA taxes are too high, perhaps its citizens should consider reducing the services they demand.
>> And of course California gets much less back than we pay to the fed govt. <<
This popular yardstick is invalid and meaningless. It must be obvious that money cannot be sent across the country (in the form of federal taxes) to Washington, DC, and be expected to return, in full, to the state(s) from whose residents it originated.
At the very least, the tax collecting and funds disbursing federal infrastructure must be maintained. Then, there are the expenses of clearly federal functions such as the national defense, the operations of Congress and the Federal Courts, etc.
Then, we get to the nubbin of things. The pretense by state and local politicians -- abetted by gullible citizens (and resident non-citizens) who are willing to swallow the line -- that so-called "federal funds" are synonymous with "free money" rather than the "taxpaper money" that they actually represent. Well, the old axiom of economics is still true: TANSTAAFL .
