There is really no need to qualify where someone lives. Making $400,000 a year with a family of 4 will give you a very nice standard of living anywhere. It will not make you rich in the short term anywhere. Making it consistently for a couple of decades plus may make you rich by some standards if you are smart with it. Then again, it's not going to provide generational wealth which is what most people consider "rich".

If you have running water, and poop indoors, you're rich.

As several have mentioned, 400k can be good or just so-so depending on where you live. Just drawing an arbitrary line at 400k does not make sense, and can really hurt those in high tax states. I'm all for a flat rate across the board for individuals, and I have no problems with legal breaks afforded to businesses. They employ and otherwise contribute to our economy in many way's. They pay their fair share.

And no, I'm not in that category and never will be now that we are both retired. Never even came close even if combining my wife's and my income.

quote:

Originally posted by TXJIM:
Making $400,000 a year with a family of 4 will give you a very nice standard of living anywhere.

Bullshit. Mrs.BurtonRW and I are 20 minutes outside of DC and the median income in our county is in the mid-40K range last I checked. Our combined income is considerably higher than that, but to maintain a proportional standard of living in Loudon County, VA, less than an hour away - in traffic, we’d have to nearly triple our income.

And we don’t have kids.

-Rob

When Obama was president, $200k was considered rich. Now, only a short 4 years later $400k is. Regardless, it's still 2%er.

Sam Dogen, founder of the personal finance site Financial Samurai, is the origin of all the article circulating the net earlier this week. Take a look at this chart, I'll let you be the judge as to the accuracy of it...



Personally, anybody that can't take better control of their finances than that and only has $34 left over at the end of the year is a loser.

That chart is a bit jacked but 400k in expensive metro areas is not anywhere near what it sounds like. Now what 400k should guarantee is that you are fully funding your retirement stuff and probably other investing. You live in northern Virginia and your house alone is a brutal beat down. And make no doubt, when all or most of your income is payroll tax eligible, the govt shaves yours nuts tight. Some would say it’s a good problem to have but that’s a cop out. It’s a lot of taxes period.

Now that same family investing a large chunk and living well inside their means can accumulate some serious wealth over time. Most people don’t have that kind of discipline.

quote:

I’m all for a flat tax...then everyone pays the same %age regardless of income

Never happen. Because then many of those getting a free ride now will be paying something.

Then many businesses will be bitching. Will mortgage interest be deductible? Then what happens to the construction industry?

No child credit? Then how will I support my six kids??

Whenever the subject comes up, their are cries of it being discriminatory and how the lower incomes pay more.


Must be the new math..

quote:

Flat Taxes vs. Regressive and Progressive Taxes. While a flat tax imposes the same tax percentage on all individuals regardless of income, many see it as a regressive tax. A regressive tax is on which taxes high-income earners at a lower percentage of their income and low-wage earners at a higher rate of their income.

There are many that think anything that lets the wealthy pay less is bad. Even if they are paying the bilk of the taxes.

Chicago is bitching about their flat tax. Because more are now paying and the wealthy are paying less of a percentage. Well that's because there are a lot more middle income than wealthy in the city.

I have a totally different view on taxes..........

Take the total federal budget $ and divide it by the number of people 22-65 years of age and every one pays that amount in $. Not %

My rationale is that each mature person in the USA gets the same amount benefits from:
1. national defense
2. Border security
3. Air traffic control
etc
and therefore should pay the same amount of $.

No grocery store (or any other retailer) charges a % of anyone's income for a loaf of bread or a pound of cheese, do they?

Give me one good reason why the Federal Government should not follow the same approach.

quote:

Give me one good reason why the Federal Government should not follow the same approach.

^^^^^^^^^^^^
Accountants would be out of work.

quote:

Originally posted by jhe888:
$400K is a large income, but it doesn't put you into the "rich" category. . .

Clearly you aren't a liberal politician.

I am a bit curious. I wonder how many liberal politicians are in that income category, and quite purposefully manage their financial affairs to minimize their own taxes, while criticizing others who do the same?

This message has been edited. Last edited by: Scoutmaster,

Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.

Learned Hand

quote:

Originally posted by BurtonRW:

quote:

Originally posted by TXJIM:
Making $400,000 a year with a family of 4 will give you a very nice standard of living anywhere.

Bullshit. Mrs.BurtonRW and I are 20 minutes outside of DC and the median income in our county is in the mid-40K range last I checked. Our combined income is considerably higher than that, but to maintain a proportional standard of living in Loudon County, VA, less than an hour away - in traffic, we’d have to nearly triple our income.

And we don’t have kids.

-Rob

Did you misread my post? It says $400,000, not $40K.......you know, as in the income the OP stated for his hypothetical post office encounter. Maybe you can't live on any street you want in any neighborhood in every town but you can find a nice home and raise a family comfortably within a reasonable commute of every city in this country for $400,000 per year.

And just for giggles I just looked up some real estate prices in Loudin County, VA. Seems you can buy a 5bd, 4bath home over 3,000sqft for under $600k..... that would be an easy mortgage on a $400,000 income and I think those accommodations would more than qualify for a pretty nice standard of living.

$600k in San Diego would buy a 1200 sq ft house in crowded Mira Mesa and you’d be happy to get it.
Our daughter and her husband bought one of these in 2015 or so, paid $440,000, so on paper have a nice appreciation that would be capital gains tax free if they sold it (yes they put down 20% so mortgage would have to be paid).
Over time that’s the way real estate prices have been in CA in the past. You thought they couldn’t go higher, but they did.
SD is still a good market for selling a house, very low inventory.

I don't care what people earn, I have friends that make three times what I do as well as some that earn less than half of what I do.

All I ask as they pay all taxes legally required, and hope they maximize any write offs available to them.

I spend a lot of time in SoCal and I am familiar with the real estate market there over the past 20 years. I used the $600k as an example for VA as there was a lot of inventory under that price point. One could obviously spend a lot more on a house with a $400k annual income, particularly in high cost areas. I would still argue that you can live a very nice standard of living within a reasonable commute of San Diego, LA, etc....on $400k. I know many people who do.

400k is all relative on a number of things. If ur 400k with 30k a year in liabilities, youre doin alright. If its 300k in liabilities there might be some issues.

I think everyone should pay as little taxes as the law allows. The tax rate seems a whole nother discussion.

I assume you mean 2 parents and 2 children when you say family of 4.

Exactly. 400K/year in rural Texas, you're doing pretty well - especially if you're not in an area where the prices have gone nuts. 400K in rural SC, and you're either a lunatic, or part of the political machine. (There might be some timber fellows/small manufacturers making that, somewhere. But, most folks with a job, won't live in rural SC, anymore.)

400K in NYC - great, you've made it from the shitty studio to a 1 bedroom apartment, in an "OK" neighborhood...

I don't know that the breakdown is that far off. If anything, I think he underestimated food costs. (At least, for decent food, and the way most kids eat.)

It is all relative. Paying for college or a special needs kid negates a big part of that income. Chronic illness or a disabilty preventing full time employment is hard on any kind of income. Looking at income without expenses or location is pointless.

quote:

Originally posted by BurtonRW:

quote:

Originally posted by TXJIM:
Making $400,000 a year with a family of 4 will give you a very nice standard of living anywhere.

Bullshit. Mrs.BurtonRW and I are 20 minutes outside of DC and the median income in our county is in the mid-40K range last I checked. Our combined income is considerably higher than that, but to maintain a proportional standard of living in Loudon County, VA, less than an hour away - in traffic, we’d have to nearly triple our income.

And we don’t have kids.

-Rob

Try living in Loudoun County with a house hold less than half of the $400,000 example. It's not fun.

quote:

Originally posted by MikeinNC:
I’m all for a flat tax...then everyone pays the same %age regardless of income...and if we could keep the .gov to spending w/i their means that would be great too.

I'd prefer no income tax and a sales tax if there must be tax other than tariffs or customs duties. Let things be taxed based upon consumption. I never minded paying tolls on the turnpike until some asshat governor a while ago decided to use TPK funds for things other than the turnpike.