From the Debt Ceiling Ho! thread:
If you see two movies per month, eat out once per week, buy a video game or two, go to a bar, maybe hit Starbucks each morning, suddenly that $400 is gone.
Begin able to do all that each month sounds pretty sweet to me. But still, that is still a choice-over-necessity lifestyle. Starbucks every morning? Brew your own coffee and that expense is cut by 95%, etc. (except the first month where the cost of a coffeemaker will cut it by only 50%).
Oh, for fuck's sake, people.
Yes, it is nice to be able to do all that! I would like to be able to do all that!
That doesn't mean that doing all that is anything approaching "ridiculous", as Than is trying to portray it. Kids growing up in the ghetto don't sit there and go, "Man, someday I'm gonna be fuckin rich and you know what I'm gonna do? Every morning I'm gonna go to Starbucks and get me a fuckin coffee!
Yeah man, I'mma be latte-rich!
Fuck, maybe if my album goes double platinum I'll even get a scone up in this bitch!"
I think the useful distinction to draw is that $100,000 is wealthier than the average family by a considerable amount, but it isn't wealthy enough that the utility of additional funds is essentially nonexistent.
If someone is making $1,000,000 a year, they probably wouldn't notice if they suddenly made $900,000 a year or $1,100,000 a year so long as somebody came along and made some anonymous adjustments to their lifestyle to keep them out of debt. Maybe their $10,000 a year personal limo is replaced by a slightly cheaper $8,000 a year one? Whatever, at a certain income level additional money is worth virtually nothing, the only things to spend it on are status symbols. More money than that and its even sillier, you really think some CEO pulling in 30 million a year would notice if they only received 29 million or accidentally got 31 million? Only if their accountant told them.
On the other hand, someone making $100,000 a year, while certainly above average, would absolutely
notice if they suddenly made $0 a year or $200,000 a year.
So let's just agree that if you're spending $30k a year on rent you've made a conscious choice to spend more on rent than is necessary, and $100,000 a year is above average but does not confer the "immunity to money" effect that significantly greater yearly incomes do.
Well, one might suggest that how much you spend on rent is only semi-voluntary, especially on the lower end. Moving is expensive and is a non-trivial decision to make. It's actually beyond the capacity of lower-income folks oftentimes, though admittedly it's generally possible for someone in the $100k income bracket to absorb the costs associated with moving.
That said, I'm not really comfortable calling that sort of thing a "luxury". It's not generally just a matter of moving two blocks and suddenly your rent drops by 50%. It often requires moving away from a metropolis, which can mean you're a good couple hours away from where you work. So now the "luxury" means not spending an extra four hours of your day sitting in traffic. "Well, just get a different job!" Okay, but that might not be possible, especially given what the economy might look like. (For example, anyone who says "well, just get a different job!" in the current environment and expects it to be trivial is likely either stupid or crazy.) It may also be the case that accepting a different job means taking a serious pay hit such that the money you save on housing is largely eaten up by the drop in income anyway, making the move nonsensical. Move far enough, end you're not just giving up the nice neighborhood, you may be giving up ready access to friends and family, too.
Yes, yes, this is all choice. But I think it's a bit much to refer to things like "sacrificing hours per day with your wife and kids because you're commuting" and "moving away from everybody you know" as luxuries in the same sense as things like fancy cars and expensive watches.
And that aside, how are we establishing the benchmark for "luxury", anyway? You can probably find a giant house somewhere in the country for well under $1000/month. Since it's possible to live in a large house for that price, why don't we consider that to be the baseline, and declare living in any place other than Bumfuck, Utah to be a luxury? You're living in a modest house in Illinois for $1200/month? Suck it up, Richie Rich, and pay more taxes! You shouldn't be paying more than $800/month, because that's what you would pay in Utah! You live in luxury, and we're going to tax you as such!
If you want to get really wacky, figure that you could live in some third-world country for pennies on the dollar. If you can find the money to pay off the local warlord, you can probably find a good 3/2 and just telecommute. Isn't living in the US at all a luxury?
Looking at the median cost of living and median income is a fairly arbitrary means of determining what constitutes "luxury". The cost of a house in Alabama means precisely dick to the guy living in the Bay Area, because no sane person considers living in Alabama a reasonable course of action for such a person.
I'm not saying that we need tweak our tax code around every regional cost of living quirk. I am
saying that for purposes of determining what tax brackets to really nail with high rates by reason of representing genuinely well-off people, we should consider such things though, and make sure that an upper-class tax rate only hits upper-class people. I think the current national dialog sort of assumes a cut-off of $250k, and I think that's reasonable, because there is nowhere in the nation where that is not well above "very comfortable".
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