Down and Out on $250,000 a Year—Is That Possible?

Responding to an article entitled “Down and Out on $250,000 a Year," David Callahan, a senior fellow at the nonpartisan public-policy advocacy organization Demos, told CNBC Tuesday that most Americans would never see that kind of money and said "why should we worry about those that do."


The Fiscal Times article makes the argument that it's tough to live on $250,000 a year.

“These are people who are socking away savings for college and retirement,” said Callahan, referring to one of the five couples profiled in the piece.

“They are driving new cars, living in a nice house in one of the nicest suburbs in America," added Callahan, referring specifically to the couple who lives in Huntington, Long Island, N.Y. "These people may not be on easy street, but they are the winners in society."

But Fiscal Times editor Ann Dowd said that earning $250,000 has become the “great divide between the middle class and rich, according to some politicians.”

Dowd added that the families profiled aren’t rich, but are “stretched like a lot of other Americans.” The couples pay between about $13,000 and $30,000 annually in non-federal taxes, according to the article.

“In four out of the five that we looked at, they are under water,” said Dowd. “They are in the red, because not only are they hit by taxes, they are being extremely responsible and saving for their future and saving for their kids' education.”

Callahan pointed out that one couple spotlighted in the Fiscal Times article enjoys $14,000 monthly after taxes. “That’s good money, no matter where you live," he said.

Callahan, author of Fortunes of Change: The Rise of Liberal Rich and the Remaking of America, also responded to President Obama’s compromise with Congress to extend Bush tax cuts for two years by saying "tax cuts for the wealthy are among the worst ways to stimulate growth in the economy."

Callahan also said that investing in infrastructure and extending jobless benefits are much better ways to promote growth.

"It's not a good time to raise taxes on anyone," countered Dowd. "The tax cuts will help the economy."