Obamanomics - Is $250,000 per Year Rich?
Presumptive Democratic nominee Barack Obama wants to raise taxes on Americans making over $250,000 per year. That may seem like a lot of money, but it depends a lot on where you live.
Someone with an income of $250,000 in Paducah, Ky., for instance, would need to make $586,000 in New York City to maintain the same lifesytlye. So, maybe Uncle Sam needs to work in a cost-of-living component to the tax code.
In contrast, a person making $250,000 in New York would only need $106,000 to live in Paducah. The biggest driver of the cost differences is housing. A comparable home in New York would cost $1.1 million vs. $0.2 million in Paducah. Rent for a comparable apartment, would be $3,425 vs. $550 per month.
Other costs are also significantly higher, but are much smaller in absolute terms - a doctor visit is nearly double, a hair cut is 50 percent higher and even bowling is three times more costly in NYC.
You would expect consumer goods players like Proctor and Gamble and Coca-Cola and retailers like Wal-Mart and Home Depot to take these factors into account in their pricing models. So should the government think about cost of living when discussing income taxes? People in higher cost areas like New York and California might vote yes.
- Video: Experts Debate - Does a $250,000 salary make you rich?
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