Last month while laying out his $3 trillion deficit reduction plan from the White House Rose Garden, a plan that included $1.5 trillion in new taxes with $800 billion coming from repealing the Bush-era tax rates for couples and individuals making more than $200,000 and $250,000, President Obama in defending his deficit plan claimed that he wasn’t engaging in class warfare. Rather for him it’s all about the math: “The money has to come from some place. If we’re not willing to ask those who’ve done extraordinarily well to help America close the deficit… the math says everybody else has to do a whole lot more, we’ve got to put the entire burden on the middle class and the poor.” Basically he was telling the critics of his plan do the math.
Okay Mr. President let’s do the math indeed. In order for an individual to become a millionaire making $200,000 it would take 5 years and for a couple making $250,000 it would take 4 years. Mind you the only way this can happen is to do it free of any debt or household expenses. But we don’t live in Utopian Land we live in Realsville where people who earn money have to spend what they earn in order to eat, provide a roof over their head, or otherwise live . (Remember the old axiom: “If you don’t work, you don’t eat.”)
For example, an individual living in California earning $200,000 per year when paid on a semi-monthly basis has gross salary of approximately $7,692.30. When you add in federal withholding ($1,880.29), Social Security ($323.08), Medicare ($111.54), state withholding ($666.31) and CA SDI ($92.31) it leaves the individual with a net take home pay of $4,618.77. A couple also in California living in a single income household earning $250,000 when paid on a semi-monthly basis has gross salary of approximately $10,416.66. When you add in federal withholding ($2,389.48), Social Security ($437.50), Medicare ($151.04), state withholding ($840.04), and CA SDI ($125) it leaves the couple with a net take home pay of $6,473.60.
(Disclaimer: The figures used are based on general guidance and estimates using a payroll calculator.)
When you add in deductions for medical and dental along with 401(k) deductions then the net take home pay can shrink even more. When you factor in household expenses or debt obligations like rent or a mortgage, property taxes, home and car insurance, car payments, student loan payments, credit card payments, school tuition, utilities, groceries, cable and internet, phone bill (including cell phone), gas and other commuter related expenses, medical expenses, visits to the dentist, expenses for extra-curricular activities and just other miscellaneous expenses the net take home pay goes down even more.
As you can see Mr. President, those that make $200,000 to $250,000 aren’t rich and they certainly couldn’t be considered wealthy by any stretch of the imagination. These folks, the very ones that you President Obama want to tax and penalize, are the very one’s you say that you trying to protect; the middle class.
Americans that make $200,000 to $250,000 aren’t just executives from Goldman Sachs or J.P. Morgan Chase. They aren’t just “Wall Street Fat Cats” or corporate jet owners as you like to categorize them Mr President. They don’t own sports franchises or yachts. They don’t own or fly in corporate jets. They don’t have complicated tax structured accounts that helps minimize their tax exposure. They certainly aren’t hedge fund or investment managers, say like George Soros, who certainly make a whole lot more than somebody’s $200,000 to $250,000.
They include airline pilots, nurses, firefighters, city employees, doctors, lawyers (not the ambulance chasing kind), accountants, local television anchors, truck drivers, and other business professionals. They commute to work, put their time in at the office, and go home only to repeat it the very next day just as those who earn $90,000 or $25,000. Their lives are neither glamorous, extravagant, nor luxurious. Even if they were rich like the Bill Gates’ or Warren Buffett’s of the world, the money that they have earned rightfully belongs to them not the State.
The idea that those with incomes of $200,000 to $250,000 are wealthy stretches credulity to the breaking point. Millionaires and billionaires don’t have incomes of $200,000 to $250,000 they earn incomes that are in the millions and billions. Just take a look at Warren Buffet for example whose adjusted gross income last year was nearly $63 million with taxable income that was nearly $40 million. The irony in all of this is that Warren Buffett’s Berkshire Hathaway has been fighting the IRS tooth and nail to avoid paying its federal tax bill of $1 billion for nearly a decade.
Just so you’re clear and understand, the idea behind President Obama’s plan to reduce the country’s $3 trillion ($3,000,000,000,000) deficit is to basically raise taxes on successful Americans and corporations; the rich, millionaires and billionaires with incomes starting at $200,000 to $250,000.
Just remember, for all of you that support the president and his class warfare rhetoric against those who make $200,000 to $250,000; it is only one small step before those of you that earn $100,000 to $150,000 will be considered rich or very rich. After all, you too can afford to pay more in taxes in order to take of the poor and elderly.