The answer, of course, depends on where you live.
|Midtown West in Manhattan|
|Kansas City BBQ spot|
Why does earning $250,000 a year make you rich in one town yet mediocre in another? Three words: cost of living. In short, certain parts of the country are simply more expensive than others. The New York Times ran an article last year which actually did the math on what it would take to be among the top 1% of earners in your respective part of America. The results, as you might expect, were largely driven by geography. For example, in the two cities I mentioned above, you would have to earn at least $359,000/yr and $609,000/yr in order to be among the top 1% of wage earners in Kansas City and New York, respectively.
The Top 20 Cities and what you have to make in order to be in the top 1% of each respective City:
1. Stamford, CT - $908,000/yr
2. Danbury, CT - $668,000/yr
3. Bridgeport, CT - $659,000/yr
4. New York, NY - $609,000/yr
5. Long Island, NY - $607,000/yr
6. Newark, NJ - $590,000/yr
7. Trenton, NJ - $584,000/yr
8. Paramus, NJ - $578,000/yr
9. San Francisco, CA - $558,000/yr
10. Boston, MA - $529,000/yr
11. Red Bank, NJ - $522,000/yr
12. San Jose, CA - $517,000/yr
13. Washington, DC - $513,000/yr
14. Lawrence, MA - $503,000/yr
15. Santa Ana, CA - $488,000/yr
16. Naples, FL - $486,000/yr
17. Chicago, IL - $480,000/yr
18. Oakland, CA - $469,000/yr
19. Los Angeles, CA - $467,000/yr
20. Ventura, CA - $461,000/yr
Notice the geography. With the exception of Chicago, every city on this list is either on the East Coast or the West Coast. In fact, the top 8 are all exclusively located within the New York City metro area alone.
On the other end of the spectrum, if you make the following salaries then you are in the top 1% of wage earners in each respective city:
1. Pueblo, CO - $258,000/yr
2. Terre Haute, IN - $241,000/yr
3. Decatur, AL - $240,000/yr
4. Johnstown, PA - $237,000/yr
5. Brownsville, TX - $233,000/yr
6. Youngstown, OH - $229,000/yr
7. Laredo, TX - $228,000/yr
8. Jackson, MI - $227,000/yr
9. Clarksville, TN - $201,000/yr
10. Flint, MI - $179,000/yr
Conversely, all of these cities are located within the Midwest or the South, far far away from either the West Coast or the East Coast.
While making $179,000 a year will put you in the top 1% of wage earners in Flint, Michigan, that same salary won't even put you in the same zip code as New York City's top wage earners. Unfortunately for Congress, the Taxing & Spending Clause of the Constitution requires that all federal taxes must be uniform throughout all 50 states so as not to show favoritism to any one state. So they can't raise taxes on people making over $600,000 a year in New York while only raising taxes on people making over $200,000 in Kansas. Due to this Constitutional restriction, it is virtually impossible for the federal government to come up with a universal definition for what may be considered "rich" in all 50 states. As we can see above, being financially "rich" is certainly a relative term, and that relativity is largely determined by geography.
1. What do you consider "rich?"
2. What will $250,000/yr get you where you live?
3. Is $250,000/yr an appropriate threshold for raising taxes on the "rich"?
4. How about $400,000/yr?
1 - The House of Representatives passed the "Fiscal Cliff Deal" proposed by the Senate by a vote of 257 to 167. The 257 included 175 Democrats and 82 Republicans.
The House of Representatives just passed the Senate fiscal cliff bill with 82 Republican votes and 175 Democratic votes. - See more at: http://crooksandliars.com/breaking-news/house-passes-senate-fiscal-cliff-dea#sthash.sY6CbGLc.dpuf