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Wednesday, January 2, 2013

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Search Terms: Fiscal, Cliff, Explained


What this cartoon teaches us is that a) it's okay to talk about politics before the first date, but b) the word "politics" might make your love interest's face contort into an unsexy tragedy mask. What this cartoon does not teach us is anything about the fiscal cliff, which was averted yesterday. For better reporting on that, go here. Also, reading between the lines in all this news, it seems one must make $450k a year now to be considered "rich," so that is a new thing to think about.

37 Comments / Post A Comment

garli

If anyone wants to pay me $450,000 a year I'd be happy to tell you about what it's like to be rich.

stuffisthings

@garli If I understand correctly, it involves a lot of moaning about private school tuition.

garli

@stuffisthings I don't have kids so how about I complain about how hard it is to maintain my yacht? (I don't have that either but I think they're easier to procure. Less Drs involved)

wee_ramekin

@stuffisthings Also, I think you might be contractually obligated to name your children Bronwyn, Silas, or something similar.

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NeenerNeener

Two must make $450,000; one must make $400,000.

stuffisthings

@NeenerNeener That's still more than 10 times the median household income in this country.

Good rule of thumb: if you earn 10 times more money than another person in the same country who is employed full time, you are rich, end of story.

NeenerNeener

@stuffisthings
I was just commenting that there is a different standard for marrieds versus singles.

NeenerNeener

Also, it's mostly still $200-250K if we're judging who's considered rich by who it's okay to increase taxes on.

stuffisthings

@NeenerNeener The median U.S. household size is 2.6 persons. Median household income is $50,054, or about $19,251 per person (including children). A typical U.S. household earning $450,000 per year would therefore be earning nearly 9 times as much as the median household, or $173,076 per member.

If your entire household makes more than $180,000 or so per year, you are in the TOP FIVE PERCENT. There is no amount of semantic magic that can make a sane person believe that a household earning almost twice as much again as the 95th percentile income is any way shape or form not "rich." Even if they are being forced at gunpoint to live in Manhattan and send their children to private schools and Ivy League universities.

boyofdestiny

@stuffisthings Strawman alert! NeenerNeener never said $450,000 (or $400,000, for that matter) isn't rich.

stuffisthings

@boyofdestiny Yes sorry, I did mean to caveat that. Though I'm not sure what other point there could be to such a comment? It's like saying "It's not a yacht, it's a large sailboat."

NeenerNeener

@stuffisthings
Actually, I'm a little unhappy with marriage penalties in the tax code, so that's more what my comment had to do with, though it's not obvious.

stuffisthings

@boyofdestiny Then again all the "middle class" people who are being forced to pay 4.6% more in taxes on the income they earn above $450,000 will probably need that straw to bundle up on the park benches where they will be sleeping from now on.

stuffisthings

(can you guys tell I'm a LITTLE BITTER that my entire raise was wiped out by the expiration of the payroll tax holiday?)

NeenerNeener

@stuffisthings
No. In all seriousness, no.
I was against that temporary cut from the get-go, and I'll probably not be pleased when I see how my first paycheck of 2013 differs from my last of 2012.
Quit playing games with Social Security taxes, government, and just try to give me some sort of benefit when the time comes, okay?

stuffisthings

@NeenerNeener Haha, I actually think the payroll tax cut is bad policy, too. What annoys me is rich (yes, rich) people whining about a tax increase they can easily afford when everyone else in the country is going to experience noticeable financial pain, too. Even a part time worker earning $10,000 a year is going to be paying over $100 more per year. $100 is a lot of money to someone like that! That's feed-your-kids-for-a-week money. If we want to play around with the system, how about payroll taxes on income above $100k for a start? It would make me feel a lot better about paying my extra fifty bucks or whatever.

ETA: Also, increasing taxes AT ALL at such an economically fragile time is really stupid macroeconomic policy, but I guess we tossed the Economics 101 textbooks into the Austerity Furnace a long time ago.

NeenerNeener

@stuffisthings
I don't think this will quite do the trick because the threshold is more than $100k, but might make you feel slightly better? Besides the top rate increase of 4.6%, rich people (those making more than $200K single, $250K married) will have to pay .9% more in Medicare taxes on the additional employment income and another 3.8% on a portion of their investment income. So, the very rich will actually see an increase of 5.5-8.4%, depending on what type of income they have.
Also, disclaimer, I am not rich, but my clients are. I don't hear a lot of whining about paying more taxes (and I think this very small CPA firm is unanimously democrat voters), but we definitely play the game of planning/projecting to avoid taxes in ways we legally can for those clients (so they can hand that money to us instead). And I think we all get annoyed when we hear someone, who we know full well has piles of money, complain about paying their tax bill.

garli

@NeenerNeener So, for the uninformed (me) when you say

Actually, I'm a little unhappy with marriage penalties in the tax code, so that's more what my comment had to do with, though it's not obvious.

Is that new penalties? Are they awful? Is the sky falling?

Also I googled but I can't tell if it's just not decided yet, has anyone seen if the interest on mortgages is still a deduction (or was it a credit?).

NeenerNeener

@garli
No, marriage penalties are not a new thing, although they sometimes try to correct them and the new legislation made no effort in that regard. A lot of people think there are all these tax advantages to being married (an in some cases, there are some advantages, like if one person makes little or no money), but once you hit a certain income level, you're typically penalized for being married - you would pay less total tax combined if each of you filed as single. It's just something that I personally don't think is fair, and although it doesn't affect me at this point, and it may sound crazy, it is something I'd consider when thinking of getting legally married (if I made a lot more than I do now).

Interest on mortgages will still be a deduction (but rich people will lose part of that deduction).

stuffisthings

@NeenerNeener Can't married people still file separately, though?

garli

@NeenerNeener Thanks for answering!

NeenerNeener

@stuffisthings
Yes, but then you're married filing separately, not single, so you get half the married rate. So, say you get imposed a certain tax when you hit $200K single, $250K married - that tax would be imposed at $125K if you're married filing separately.

wee_ramekin

Completely off topic....

So, one of my New Year's pseudo-resolutions (maybe) is to make myself go on one date per month for the rest of the year (maybe). What I have learned from this video is that I should flap my mouth open and closed silently while the other person is talking, all the while gesticulating welcomingly. Now I realize why none of 2012's first dates panned out so well, you guys. Now. I. Know.

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