Comments on: The income-adjusted cost of living in New York, Andrew Schiff edition http://blogs.reuters.com/felix-salmon/2012/03/07/the-income-adjusted-cost-of-living-in-new-york-andrew-schiff-edition/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: JET999998 http://blogs.reuters.com/felix-salmon/2012/03/07/the-income-adjusted-cost-of-living-in-new-york-andrew-schiff-edition/comment-page-1/#comment-36774 Wed, 14 Mar 2012 03:26:51 +0000 http://blogs.reuters.com/felix-salmon/?p=12365#comment-36774 We know how the left will answer this. They will simply claim as Obama prefers to do, that its because the “rich don’t pay their fair share.” Wall Street bonuses are off more 20% this year and NYC is taking a big hit, but all the concern by Bloomberg seems odd, because Obama puts out the notion they’re all pretty much like Warren Buffet and paying next to nothing anyways.

This entire war on the top 1% is nothing more than a hate campaign. First all approximately 354k or more in income per year puts a taxpayer(just) into this top 1% where many individuals are concentrated. These are primarily wage earners meaning they pay high effective rates and very high (35% to 45% plus including state ,city, medicare etc) marginal rates, and generally derive little if any income from low taxed (15%) cap gains or dividends like Warren Buffet does, who intentionally structures his income with low wage salary to avoid taxes.

As for the so-called “Buffet Rule”, it may not actually apply to Buffet himself because the “taxable income” calculation still deducts out charitable contributions, but we need Buffet and his secretary’s tax return to figure what the exact situation is. You may have heard “Mr I don’t pay enough” Warren Buffet and his NetJets firm is fighting the IRS which claims they owe 300 million plus. Basically the IRS is treating NetJets like a private airline with equity contribution by so-called “owners”, arguably form over substance.

Now 354k plus in NYC is reasonably well off but after taxes its not as if you’re ultra rich. I would argue in NYC its probably somewhere between upper middle class and very low wealthy class. Wall Street bonus types are easy to attack because they’re viewed as paper shufflers, but in fact in terms of numbers you will find many high value professions in this general range including scientists, engineers, MDs and so forth right at this level or thereabouts, particularly those with very high levels of expertise (e.g. 15 to 20 yrs out of medical school) including for example top surgeons or other specialist MDs etc that could well be saving your life down the road or even tomorrow, hardly useless Wall Street types.

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By: JET999998 http://blogs.reuters.com/felix-salmon/2012/03/07/the-income-adjusted-cost-of-living-in-new-york-andrew-schiff-edition/comment-page-1/#comment-36771 Tue, 13 Mar 2012 23:28:20 +0000 http://blogs.reuters.com/felix-salmon/?p=12365#comment-36771 This entire war on the top 1% is nothing more than a hate campaign. First all 354k in income per year puts you (just) into the top 1% where many individuals are concentrated. These are primarily wage earners meaning they pay high effective rates and high (35% plus also state,city taxes etc) marginal rates, and generally derive little if any income from low taxed (15%) cap gains or dividends like Warren Buffet does.
As for the so-called “Buffet Rule”, it may not actually apply to Buffet himself because the “taxable income” calculation still deducts out charitable contributions, but we need Buffet and his secretary’s tax return to figure what the exact situation is. You may have heard “Mr I don’t pay enough” Buffet and his NetJets firm is fighting the IRS which claims they owe 300 million plus. Basically the IRS is treating NetJets like a private airline with equity contribution by so-called “owners”, arguably form over substance.

Now if you earn over a certain amount (e.g 354k for sure or less sometimes will do it) and for example you happen to have 2 kids and they’re going to private colleges, forget financial assistance because you’re on your own, as you and your children will not qualify in any way, and you will need to earn min 600k pre tax just to pay the approx 300 to 400k cash you will be paying. Neither you or your children (under the new law) even qualify for subsidized Stafford loans.

Now 354k plus is well off but after taxes its not like you’re super rich. I would argue in NYC its probably somewhere between upper middle class and very low wealthy class. Wall Street bonus types are easy to attack because they’re viewed as paper shufflers, but in fact in terms of numbers you will find many high value professions in this general range including scientists, engineers, MDs and so forth right at this level or thereabouts, particularly those with very high levels of expertise (e.g. 15 to 20 yrs out of medical school) including for example top surgeons or other specialist MDs etc that could well be saving your life down the road or even tomorrow, hardly useless Wall Street types.

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By: TFF http://blogs.reuters.com/felix-salmon/2012/03/07/the-income-adjusted-cost-of-living-in-new-york-andrew-schiff-edition/comment-page-1/#comment-36739 Mon, 12 Mar 2012 12:41:13 +0000 http://blogs.reuters.com/felix-salmon/?p=12365#comment-36739 !!!! Perfect, Strych09, just perfect! :)

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By: Strych09 http://blogs.reuters.com/felix-salmon/2012/03/07/the-income-adjusted-cost-of-living-in-new-york-andrew-schiff-edition/comment-page-1/#comment-36734 Sun, 11 Mar 2012 22:20:10 +0000 http://blogs.reuters.com/felix-salmon/?p=12365#comment-36734 JET999998, Brian McFadden had a fantastic strip in the New York Times today that is entirely on point for this and the previous Andrew Schiff, upper class whiner, thread:

http://www.nytimes.com/slideshow/2012/01  /08/opinion/sunday/the-strip.html

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By: TFF http://blogs.reuters.com/felix-salmon/2012/03/07/the-income-adjusted-cost-of-living-in-new-york-andrew-schiff-edition/comment-page-1/#comment-36730 Sat, 10 Mar 2012 21:29:35 +0000 http://blogs.reuters.com/felix-salmon/?p=12365#comment-36730 Does owning a car improve your standard of living in NYC?

You have one of the best public transportation systems there. You can reach tens of thousands of businesses, millions of people, without ever getting behind the wheel. Isn’t that a good thing?

And on those rare occasions that you want to take a road trip, you can rent at reasonable expense. Owning a car costs roughly $6k/year for most of the country. Your “median household” with $50k income and two adults likely spends 1/4 of its gross income on automobiles. In many locations it is impossible to live without each adult having their own.

NYC has its problems (very small apartments at very high cost), but that isn’t one of them.

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By: JET999998 http://blogs.reuters.com/felix-salmon/2012/03/07/the-income-adjusted-cost-of-living-in-new-york-andrew-schiff-edition/comment-page-1/#comment-36721 Sat, 10 Mar 2012 10:31:14 +0000 http://blogs.reuters.com/felix-salmon/?p=12365#comment-36721 100k for a family or 4? assuming honest taxpayers living in NYC,. net of taxes. rent, food, and health insurance premiums- they will live as if they are in poverty – in part because they don’t qualify for the 29 tax free handouts the offical “poverty” classes (often underground cash supplemented types) will qualify for. They cannot afford a car nor a garage to park it in. Nor will they be able to save for their childrens education.

Thus they are new “high income” poverty class.

Now that said, compared to 3rd world persons they are well off, but China figures out the Ponzi and calls in its debts, probably americans across the board will have to reduce their standard of living by an additional one-third – as China no longer lends us money.

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By: JET999998 http://blogs.reuters.com/felix-salmon/2012/03/07/the-income-adjusted-cost-of-living-in-new-york-andrew-schiff-edition/comment-page-1/#comment-36719 Sat, 10 Mar 2012 10:14:38 +0000 http://blogs.reuters.com/felix-salmon/?p=12365#comment-36719 Mr Schiff works for his brother who owns the firm, so his case is very unusual. This may also explain why he has such a high base salary, and is less dependent on bonuses.

First of all 350k per year working for a Wall related firm in any high cost city (not all Wall Street jobs are in NYC), and could include other east coast cities tied into the same industry -but its not “rich” per se. Rich in most people’s mind (the way Obama spins it) means 2nd homes and the Hamptons and (lol) personal use of private jets, and its more like old high mileage cars, and going camping in the summer. Second the job itself can end at any time. Third, bonuses are very unpredictable. Its not (if lets say you’re in your 40’s) like being a tenured professor at an Ivy League college where you know 10 to 20 yrs down the road you’re going to be making the same amount of money.

As for sending kids to private schools? Unless you got the worst public schools around, not worth it, because when your kids get to college, you WILL have to pay 100% as 350k income means you they will not qualify for assistance or any subsidized loans.

Rich today requires at least 500k to 1,000,000 per year and even then its not going to be 2nd homes in the Hamptons or private jets, not even close

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By: KenG_CA http://blogs.reuters.com/felix-salmon/2012/03/07/the-income-adjusted-cost-of-living-in-new-york-andrew-schiff-edition/comment-page-1/#comment-36698 Fri, 09 Mar 2012 16:14:30 +0000 http://blogs.reuters.com/felix-salmon/?p=12365#comment-36698 o.k.

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By: TFF http://blogs.reuters.com/felix-salmon/2012/03/07/the-income-adjusted-cost-of-living-in-new-york-andrew-schiff-edition/comment-page-1/#comment-36693 Fri, 09 Mar 2012 14:26:38 +0000 http://blogs.reuters.com/felix-salmon/?p=12365#comment-36693 KenG, one additional factor (which perhaps plays back to Andrew Schiff as well)…

Those in Kansas are more likely to own their home than to rent. Those in NYC are more likely to rent than to own (guessing, not verified).

When you invest your capital and rent your housing, your stated income will be higher than when you apply your capital directly towards housing. There isn’t necessarily a real difference in wealth or lifestyle — but it is taxed differently by the IRS.

There are similar choices spotted throughout the household economic picture. Do you get a full time job or stay home with the kids? Do you buy a car? Or lease a car? Or pay $50/day on those rare occasions that you need a car? Some choices generate greater cash flow, some avoid monetizing the lifestyle.

And one of the greatest lifestyle factors is the difference between a two-parent and a one-parent household. If my wife and I were to separate, our combined income would likely *drop* (since we wouldn’t be able to share child care and household duties as effectively and thus would need to cut back on hours). Simultaneously, we would need to spend an additional $20k-$40k to establish a second household. To put it in more tangible terms, that would be the difference between public school and private school for the kids.

So I wholly agree with your point that lifestyle cannot be measured strictly by income. I just feel it is a more complex equation than $100k buys XXX here and YYY there.

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By: TFF http://blogs.reuters.com/felix-salmon/2012/03/07/the-income-adjusted-cost-of-living-in-new-york-andrew-schiff-edition/comment-page-1/#comment-36691 Fri, 09 Mar 2012 14:09:13 +0000 http://blogs.reuters.com/felix-salmon/?p=12365#comment-36691 KenG, I agree, to a point…

The family making $100k in Kansas lives in a large house with a spacious yard, owns a pair of $20k-$30k vehicles, perhaps sends their kids to a church school.

The family making $100k in NYC is crammed into an apartment half the size, probably does not own a car, and almost certainly sends their kids to public school.

“that’s not the middle class lifestyle that we have been led to believe is typical.”

The more I read, the more I hear, the less I believe in the concept a “typical” middle class lifestyle. There are myriad different middle class lifestyles, at income points from $50k to $250k and in locations across the country.

If you choose to live in an expensive area, then you presumably have good reasons to do so. This is a free country, and you don’t need a relocation permit to move to Detroit (where $50k will buy you a large house) or Kansas. Presumably everybody in NYC or San Francisco is aware that there are cheaper places they could live.

So look at the employment situation in a given location. Look at the money you might make and the lifestyle that you might live with that money. If you don’t like the answer, then consider another location.

We choose to live in an expensive metro area because the concentration of universities (research universities literally next door to teaching colleges) offers unique opportunities. The concentration of wealth (communities with a median household income in the mid six-figures) offers other opportunities. A diverse culture into which people of color blend, where there are thriving communities of people whose ancestors did not come from Northern Europe. Established nature preserves with active educational programs for kids.

You won’t find that in Kansas. Go ahead and enjoy the 2500 square foot house and the multiple SUVs in the driveway. From my perspective, the $100k buys more here than it would there. Yet perhaps other people, with other priorities, would disagree?

“You’re setting the bar low for me.”

A surprising number of people can’t even make it over THAT bar. In addition to the Wall Street trading desks, consider the professional con artists who skirt the fringes of the law, preying on gullible retirees with “free seminars”? Or contractors who bid one price, demand another, and turn in shoddy work? There are many who contribute nothing (positive) to society.

And the wealth you extracted from the INVESTORS who bought your company was taken directly from the wealthy. As long as you did not misrepresent, I’m not going to feel sympathy for those who might have overpaid for a business they couldn’t operate profitably.

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