Millennial men with different incomes(esquire.com)
esquire.com
Millennial men with different incomes
http://www.esquire.com/lifestyle/money/news/a48020/four-millennial-men-four-incomes/
73 comments
You should feel somewhat lucky, because your parents made a substantially bigger investment in you than you realize, through which you were allowed free time to acquire the technical aptitude to become a developer (or whatever else allowed you to become a high earner).
Whether you want to keep feeling guilty is up to you, but you should definitely go thank your parents again!
> When I read about the guy who takes two trains a bus and walks a mile to get to work, while trying his best to save just $1100 for a car
In countries where public transportation is the norm, there isn't anything strange about the first part of the sentence. It's just that USA really punishes non drivers through some really poor infrastructure choices made 60-70 years ago.
Whether you want to keep feeling guilty is up to you, but you should definitely go thank your parents again!
> When I read about the guy who takes two trains a bus and walks a mile to get to work, while trying his best to save just $1100 for a car
In countries where public transportation is the norm, there isn't anything strange about the first part of the sentence. It's just that USA really punishes non drivers through some really poor infrastructure choices made 60-70 years ago.
You mention parents twice when the comment you replied to never did. Why?
You're projecting that the commenter succeeded because of their parents, not in spite of them.
You're projecting that the commenter succeeded because of their parents, not in spite of them.
I'm projecting it because it is by far the most likely outcome.
What were the poor infrastructure choices? I'm of the impression that the highway system (if that's what you're referring to) worked very well. Sure, it would be nice to have a train going everywhere you wanted, but in a place as sparse as 1950s America, that wasn't feasible. The choices don't seem poor to me, but they worked so well that there is less need for public transit. The remaining problem is that the cost to own or contract a car is too high for many folks--hopefully the self-driving car revolution will alleviate that and prove once again that our highway infrastructure was an investment and not a liability.
My first job was at a Wal-Mart. My second job was at a meatpacking plant, because it simply paid better. My third job after busting my ass at home was doing web dev, back in the late 90s, in which I was hilariously underpaid. Today I'm a self-employed data warehousing and database performance consultant with no shortage of work and paying myself about what the Junkluggers guy does.
There's a way out if you bust your ass and do nothing but obsess about finding something better. Takes a while. Sometimes it takes 18 months just to stumble into an opportunity worth pursuing. Though if you don't put in the effort (and get a bit lucky), nothing changes.
One thing I definitely took away from that article? Holy crap am I frugal. I save a large multiple of #2 for retirement (Solo 401K and IRA maxed every year, with a bit extra on top in a taxable account), and spend about on par with #3. Granted, I've earned what I got so I don't squander it.
As for #4's commute, I've done similarly bad recently, albeit voluntarily. Walk to bus station, take bus one. Transfer to second bus, then walk two-thirds of a mile. About 100 minutes each way, and an average of 3 1/2 hours a day. I could save a wee bit of time with other options (not including car), but at 50-200% increased cost, so I maintained the frugal option even if it cost me another 30-40 minutes a day. Though it does mean that you tend to wake up at 5:45AM to make breakfast and then get to a client for 9AM, to then get home by around 7PM and hopefully have eaten and finished any chores by 8PM. You are beat. It's not easy to then put in extra effort to get other things -- like looking for a better opportunity -- done.
There's a way out if you bust your ass and do nothing but obsess about finding something better. Takes a while. Sometimes it takes 18 months just to stumble into an opportunity worth pursuing. Though if you don't put in the effort (and get a bit lucky), nothing changes.
One thing I definitely took away from that article? Holy crap am I frugal. I save a large multiple of #2 for retirement (Solo 401K and IRA maxed every year, with a bit extra on top in a taxable account), and spend about on par with #3. Granted, I've earned what I got so I don't squander it.
As for #4's commute, I've done similarly bad recently, albeit voluntarily. Walk to bus station, take bus one. Transfer to second bus, then walk two-thirds of a mile. About 100 minutes each way, and an average of 3 1/2 hours a day. I could save a wee bit of time with other options (not including car), but at 50-200% increased cost, so I maintained the frugal option even if it cost me another 30-40 minutes a day. Though it does mean that you tend to wake up at 5:45AM to make breakfast and then get to a client for 9AM, to then get home by around 7PM and hopefully have eaten and finished any chores by 8PM. You are beat. It's not easy to then put in extra effort to get other things -- like looking for a better opportunity -- done.
Do most people actually have short commutes? I think I've grown so used to commuting an hour + each way doesn't faze me at all. In high school it was 45 mintues on a bus each way. University was bus bus skytrain bus for about an hour and 45 minutes and work now is bus bus train skytrain taking about 80 minutes. Honestly I would rather spend 80 minutes on transit than 45 minutes diving since I can sleep on the train in the morning and I'm usually reading on the way back not to mention the cost of owning a car.
It depends. For me, I prioritize it because a long commute adds zero value to my life, just costs (monetary, mental and time). I moved years ago to where mass transit could cover anywhere I needed to go, and could often get me there in 20 minutes or less. Granted, everyone's priorities are different, so for some they'll take a longer commute to facilitate other things.
Most of my early jobs were 15-25 minutes each way via car. Later on as I moved towards increasingly urban areas it did increase to around 45-60 minutes each way. Then I moved, and shrunk it to 15-20 minutes again via mass transit. Then I started working for myself, and that's anywhere from 0 minutes (remote) to 35-40 minutes each way -- with a few extreme cases being 90-100 minutes each way because I choose not to drive (I have a car, but it exists for fun, not commuting, though I'll use it for a commute or meeting in a pinch) and to minimize cost.
Most of my early jobs were 15-25 minutes each way via car. Later on as I moved towards increasingly urban areas it did increase to around 45-60 minutes each way. Then I moved, and shrunk it to 15-20 minutes again via mass transit. Then I started working for myself, and that's anywhere from 0 minutes (remote) to 35-40 minutes each way -- with a few extreme cases being 90-100 minutes each way because I choose not to drive (I have a car, but it exists for fun, not commuting, though I'll use it for a commute or meeting in a pinch) and to minimize cost.
I walk 30 minutes up a steep hill every day. Walking out of my apartment to the garage, driving to the parking lot, and walking from there to my office actually takes closer to 40 minutes.
I love every step of my daily uphill walk, especially in the winter. I love the endorphins boosting my start to the day, and I love knowing I can pretty much eat as I please (excluding alcohol) and end the day at a caloric balance.
Side note: I previously lived further than practical for walking, but with my car in a driveway it was much faster to drive. Wouldn't go back for any reason.
I love every step of my daily uphill walk, especially in the winter. I love the endorphins boosting my start to the day, and I love knowing I can pretty much eat as I please (excluding alcohol) and end the day at a caloric balance.
Side note: I previously lived further than practical for walking, but with my car in a driveway it was much faster to drive. Wouldn't go back for any reason.
Maybe this is the way that I've been lucky, but I was always either a 10min drive or a 5min walk from school as a boy, depending on which building (elementary/middle/high school). At college, I was on campus, and a 10min walk from anything. First job was a 45min subway ride, second job is a 30min subway, including walking. My mother was 15min from her job her whole life.
The important thing is to be awareness of this disparity. It's often set up as a false dichotomy: you either have to feel guilty, or you have to ignore and forget poverty and privilege.
It's ok to observe differences and then keep that in mind when relating to other people. Use this knowledge to be more empathetic. Be kinder. Be grounded. Be connected. You can lead your best life earning tons of money while also understanding your relationship to the world and the diversity it contains. You can let this understanding inform your responses and intentions.
Processing the world isn't simple. But you can continue to evolve how you relate to differences and different people, and that can guide your overall goals as well as your decisions in specific interactions.
It's ok to observe differences and then keep that in mind when relating to other people. Use this knowledge to be more empathetic. Be kinder. Be grounded. Be connected. You can lead your best life earning tons of money while also understanding your relationship to the world and the diversity it contains. You can let this understanding inform your responses and intentions.
Processing the world isn't simple. But you can continue to evolve how you relate to differences and different people, and that can guide your overall goals as well as your decisions in specific interactions.
While I appreciate the good intentions behind this ethos, and the value it may contain, I gotta ask: what real good does this awareness accomplish? I can be as aware as I want of the vast extent to which the system from which I've reaped such rewards has crushed the life from others -- what of it? What good does it do them?
If you have this awareness and a hefty surplus of resources, you're likely to use it to improve society in some way. Likely driven by your own desire to feel good about yourself, yet still effective.
It's not wrong to notice how unfair it all is. I've seen several sides of it. But in terms of "what do I do about it," self-flagellation is probably not correct.
My answer has become: Attempt to set some business idea of your own in motion. That doesn't mean that you are going to be good or motivated at business or have any worthwhile plans, of course. That is the curse of being in that position, and a lot of people do run away from such a responsibility. But it's a concrete way in which you can make things less broken - build people's careers, sell useful products or services, market new ideas, etc. It makes me feel OK with myself.
And most crucially, it really doesn't have to be a brave "save the world with VC backing" plan - it can be a totally selfish idea like "a cool gadget for me and my friends", accomplished by employing a handful of contractors for a few months part-time. The saving comes in via the attention to social responsibility you take in implementing it - whom you employ, how you employ them, adapting the product to a marketing strategy, what manufacturing processes you use, etc. All of that creates an atmosphere around the business, and the atmosphere itself changes the way in which the world works. The final product is just one tiny part of it.
My answer has become: Attempt to set some business idea of your own in motion. That doesn't mean that you are going to be good or motivated at business or have any worthwhile plans, of course. That is the curse of being in that position, and a lot of people do run away from such a responsibility. But it's a concrete way in which you can make things less broken - build people's careers, sell useful products or services, market new ideas, etc. It makes me feel OK with myself.
And most crucially, it really doesn't have to be a brave "save the world with VC backing" plan - it can be a totally selfish idea like "a cool gadget for me and my friends", accomplished by employing a handful of contractors for a few months part-time. The saving comes in via the attention to social responsibility you take in implementing it - whom you employ, how you employ them, adapting the product to a marketing strategy, what manufacturing processes you use, etc. All of that creates an atmosphere around the business, and the atmosphere itself changes the way in which the world works. The final product is just one tiny part of it.
God damnit dude; it's Monday. I didn't need this! sips Starbucks while typing this on a MacBook Pro in a large AC'ed office building while making 100k
> Does anyone else feel extremely guilty about this?
Personally, I don't.
In life, luck is always involved. Some people are born with rare diseases. Some people are born with physical attributes that make them more desirable by their preferred sex. Some people are born as an ethnicity that gives them more social power than others. Some people are born smarter than others. Some people are born more susceptible to mental illness. Some people are born into very rough families. Etc.
I suppose I don't feel bad for having what I have because quite frankly, other people who may have less wealth than I certainly have life advantages over me to which I would certainly not expect them to feel guilty about.
Personally, I don't.
In life, luck is always involved. Some people are born with rare diseases. Some people are born with physical attributes that make them more desirable by their preferred sex. Some people are born as an ethnicity that gives them more social power than others. Some people are born smarter than others. Some people are born more susceptible to mental illness. Some people are born into very rough families. Etc.
I suppose I don't feel bad for having what I have because quite frankly, other people who may have less wealth than I certainly have life advantages over me to which I would certainly not expect them to feel guilty about.
Here's why I don't feel guilty:
https://www.stilldrinking.org/programming-sucks
> So no, I'm not required to be able to lift objects weighing up to fifty pounds. I traded that for the opportunity to trim Satan's pubic hair while he dines out of my open skull so a few bits of the internet will continue to work for a few more days.
Oh sure I'm not typically over-the-top like the article. I do enjoy the act of programming much of the time, and camel-y jokes. But I don't feel bad that I'm getting paid a lot of money for what I much-of-the-time consider work that a bright high schooler could also do. Having worked with some not-so-bright college interns recently I feel even less guilty, if that's possible. To some extent we all make our own choices, mine led me here, why should I agonize over where other people's led them? I'm not interested in controlling their lives.
https://www.stilldrinking.org/programming-sucks
> So no, I'm not required to be able to lift objects weighing up to fifty pounds. I traded that for the opportunity to trim Satan's pubic hair while he dines out of my open skull so a few bits of the internet will continue to work for a few more days.
Oh sure I'm not typically over-the-top like the article. I do enjoy the act of programming much of the time, and camel-y jokes. But I don't feel bad that I'm getting paid a lot of money for what I much-of-the-time consider work that a bright high schooler could also do. Having worked with some not-so-bright college interns recently I feel even less guilty, if that's possible. To some extent we all make our own choices, mine led me here, why should I agonize over where other people's led them? I'm not interested in controlling their lives.
Unless you've got a scam-y job I don't see why you should feel guilty.
Nothing wrong with the top end of things. Would be good to have some kind of basic income in place to help patch things on the bottom end.
Nothing wrong with the top end of things. Would be good to have some kind of basic income in place to help patch things on the bottom end.
> Does anyone else feel extremely guilty about this?
Not really. I feel like I've put in the time and effort (along with a little luck) to get to where I am in life.
Unfortunately, life is unfair. While it was nice having parents who supported me, I feel like it's just an advantage in life I was fortunate to have. On the contrary, I'm a short, unattractive, non-white male living in a city that's 90% white; there isn't much I can do in that regards. That's just life.
Not really. I feel like I've put in the time and effort (along with a little luck) to get to where I am in life.
Unfortunately, life is unfair. While it was nice having parents who supported me, I feel like it's just an advantage in life I was fortunate to have. On the contrary, I'm a short, unattractive, non-white male living in a city that's 90% white; there isn't much I can do in that regards. That's just life.
It definitely contributes to the resentment that a lot of people feel towards tech employees. Especially when you consider that the multi-hop public transit trip like that probably costs him 20-30% of his daily pay. Contrast that with: http://sfist.com/2016/07/06/heres_what_employees_of_google_a...
Why do you associate public transit use and not owning a car with low income? I make $100k+ and I don't own a car; I commute to work every day on public transit (with two transfers on the return journey, something a lot of people say high earners won't do) and I use public transit to get around whenever possible.
So 92% of Seattle (the city, not the region, which is a weird way to look at Seattle transit, but sure) transit commuters are above the poverty line...?
That's literally all the data actually said. If your no-content comment was supposed to convey something else, I'm afraid it's lost on me.
That's literally all the data actually said. If your no-content comment was supposed to convey something else, I'm afraid it's lost on me.
https://imgur.com/a/DV6Nd
you could try actually reading it.
you could try actually reading it.
If I made $100k, I'd move to a place where I didn't need my car any more. Good public transit is very convenient. Car maintenance is not.
My wife and I only have one car which basically only gets used on the weekends. Having good public transit makes a great difference for all income levels. All boats rise with the tide.
3 'more or less' typical millenials? 3 CEOs and one poor guy? Really?
The WSJ had a similarly out of touch cross-section a while back http://www.wsj.com/news/interactive/WEALTH0105
Ah, the HENRYs.
I remember laughing my head off at this crew working at a bank in the middle of the financial crisis, waiting for the world to end.
http://www.felixsalmon.com/2008/10/unsympathetic-demographic...
I remember laughing my head off at this crew working at a bank in the middle of the financial crisis, waiting for the world to end.
http://www.felixsalmon.com/2008/10/unsympathetic-demographic...
Wow, this just takes it to a whole new level
Why does the single parent with $260k a year income look so sad? In fact, why does everyone in this look like they're in a Ken Loach film about a miner's strike?
Because of those cuh ray zee tax increases, of course! /s
Not sure seriously. I'm with you, these people all look so sad. I'm not sure if it's a work life balance thing or if I'm just crazy thinking that, if I could insanely increase my income, I'd be happier...
Not sure seriously. I'm with you, these people all look so sad. I'm not sure if it's a work life balance thing or if I'm just crazy thinking that, if I could insanely increase my income, I'd be happier...
That's one bunch of sad looking people.
To be fair, one of the CEOs was staunchly in the middle class ($55K/yr).
Granted, but it's still a decent margin above the median millenial at $33k/yr. I would have liked to see at least one closer to the median.
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The comments about taxes are really interesting. There is a perception in the U.S. that the wealthy don't pay enough taxes, but in reality the top 10% carries a much a larger share of the tax burden (relative to their share of income) than in countries like the U.K., France, Germany, and Sweden: https://www.washingtonpost.com/news/wonk/wp/2013/04/05/ameri....
So the question is: where does this perception come from? Is it this way in other countries? Do people in Sweden complain that the rich don't pay enough taxes? Or is it something cultural in the U.S.
So the question is: where does this perception come from? Is it this way in other countries? Do people in Sweden complain that the rich don't pay enough taxes? Or is it something cultural in the U.S.
This comes up a lot in a discussion about taxes, and there's a big logical problem with it.
We have a much higher wealth gap than those countries. So tax burden as a percentage isn't a useful metric.
If we had a healthier lower and middle class, they would be paying more in taxes, which would ease the burden on the wealthiest considerably. But our middle class is shrinking, and the rich are becoming extraordinarily rich. So of course their tax burden as a percentage of the whole is going to be more.
The concern people have is about the taxes that individuals in the top brackets pay in relation to the middle and lower brackets, but also this acts as a proxy for concern about infrastructure, safety nets and an ever shrinking middle class.
We have a much higher wealth gap than those countries. So tax burden as a percentage isn't a useful metric.
If we had a healthier lower and middle class, they would be paying more in taxes, which would ease the burden on the wealthiest considerably. But our middle class is shrinking, and the rich are becoming extraordinarily rich. So of course their tax burden as a percentage of the whole is going to be more.
The concern people have is about the taxes that individuals in the top brackets pay in relation to the middle and lower brackets, but also this acts as a proxy for concern about infrastructure, safety nets and an ever shrinking middle class.
> We have a much higher wealth gap than those countries. So tax burden as a percentage isn't a useful metric.
Which is why I compared tax burden as a percentage of total taxes to income as a percentage of total income. In Sweden, the top 10% make roughly a quarter of the income and pay roughly a quarter of the taxes. In the U.S., they make about a third of the income, but pay almost half the taxes.
Which is why I compared tax burden as a percentage of total taxes to income as a percentage of total income. In Sweden, the top 10% make roughly a quarter of the income and pay roughly a quarter of the taxes. In the U.S., they make about a third of the income, but pay almost half the taxes.
As pointed out above, though, top 10% is not a very useful metric.
Are the bottom 10% a better statistic? In the UK the bottom 10% pays 43% of the tax burden, many of them do not pay income tax at all.
This is what you get when you have both direct and indirect taxes, income tax in the UK is only 29% of the total Tax Revenue corporate tax revenue is on the other hand only 8%, capital gains taxes are <1% of total tax revenue while things like VAT ~15%, National Insurance at ~19%, Fuel (both gas and heating) and Local taxes at 5% suck the poor, the working, and the middle classes dry.
People always claim Europe this Europe that look at how well they tax the rich, well sorry but they aren't taxing the rich well, and the European taxation system isn't progressive it's regressive.
The majority of the tax revenue in virtually every EU country does not come from progressive taxation, it doesn't come from taxing the rich via capital gains or corporations it's done by taxing nearly every item you buy and every service you use at a flat percent that doesn't cares if you are rich or not.
People always claim Europe this Europe that look at how well they tax the rich, well sorry but they aren't taxing the rich well, and the European taxation system isn't progressive it's regressive.
The majority of the tax revenue in virtually every EU country does not come from progressive taxation, it doesn't come from taxing the rich via capital gains or corporations it's done by taxing nearly every item you buy and every service you use at a flat percent that doesn't cares if you are rich or not.
Bottom 10% pays 43% of tax burden - are you sure? That doesn't sound like it can possibly be right.
My wording wasn't optimal, I meant to say that the tax burden on the bottom 10% is 43%, that's the percentage of income they lose to taxes while the top 10% only lose 35%.
https://www.equalitytrust.org.uk/sites/default/files/unfair_...
The US's "poor" have a higher purchasing power then the median income of not only the EU average but the rich EU member states.
Income inequality means squat when your middle class has more wealth than some of the last decimal point percentiles in Europe.
Europe doesn't have income equality it has income stagnation and it assures that through taxing both you and your employer not only that your income would be on average lower that your post tax income would be considerably lower.
You can be making 100-150k $ in Europe and have almost no ability to accumulate wealth due to the taxation this is not equality this is enforced wealth caps. If you are old money or corporations on the other hand you enjoy some of the lowest corporate tax rates in the developed world as well as tax heavens and low capital gain taxes all from within the EU or one of its "territories".
Income inequality means squat when your middle class has more wealth than some of the last decimal point percentiles in Europe.
Europe doesn't have income equality it has income stagnation and it assures that through taxing both you and your employer not only that your income would be on average lower that your post tax income would be considerably lower.
You can be making 100-150k $ in Europe and have almost no ability to accumulate wealth due to the taxation this is not equality this is enforced wealth caps. If you are old money or corporations on the other hand you enjoy some of the lowest corporate tax rates in the developed world as well as tax heavens and low capital gain taxes all from within the EU or one of its "territories".
It's the perception.
In Europe the middle class and the lower classes share more of the tax burden than the rich.
This what pretty much keeps them fixed in their respective bracket.
When you pay over 50% of your income in taxes this includes VAT, property tax, national insurance and other taxes rather than just income tax you never actually accumulate wealth under almost any circumstances.
You end up being dependant on the social services that you mostly fund because you simply can't get a head regardless of how well you are paid. This is why there is almost no new money in Europe especially the continental countries.
Taxation in Europe is an industry many EU countries have tax revenue at 50% of their GDP that's not a healthy system.
And as far as wealth redistribution goes that's also a myth, EU countries have lower corporate tax rates than the US they also have lower capital gains taxes with some countries having them at 5% or lower.
At the end it's the middle classes who gets screwed the most with the lower classes not far behind.
VAT and high import tariffs make the EU a pretty bad place to live on average and below income.
Food is expensive because importing cheap food is hard and by the time you save enough money on a "luxury" item you get stuck with 20% VAT premium on everything.
The US tax system is by far better, the problem in the US is lack of focus on public spending and programs, you spend more public funds on education and health care than Europe but the result is questionable at best. This not only shows that the taxation in Europe is too high but also that the US can have a single payer system without additional taxes if it restructures Medicare and Medicaid and its state and public schools.
When you pay over 50% of your income in taxes this includes VAT, property tax, national insurance and other taxes rather than just income tax you never actually accumulate wealth under almost any circumstances.
You end up being dependant on the social services that you mostly fund because you simply can't get a head regardless of how well you are paid. This is why there is almost no new money in Europe especially the continental countries.
Taxation in Europe is an industry many EU countries have tax revenue at 50% of their GDP that's not a healthy system.
And as far as wealth redistribution goes that's also a myth, EU countries have lower corporate tax rates than the US they also have lower capital gains taxes with some countries having them at 5% or lower.
At the end it's the middle classes who gets screwed the most with the lower classes not far behind.
VAT and high import tariffs make the EU a pretty bad place to live on average and below income.
Food is expensive because importing cheap food is hard and by the time you save enough money on a "luxury" item you get stuck with 20% VAT premium on everything.
The US tax system is by far better, the problem in the US is lack of focus on public spending and programs, you spend more public funds on education and health care than Europe but the result is questionable at best. This not only shows that the taxation in Europe is too high but also that the US can have a single payer system without additional taxes if it restructures Medicare and Medicaid and its state and public schools.
> This what pretty much keeps them fixed in their respective bracket.
The most recent study suggests that European countries have higher class mobility than the US does. High taxes are not holding their populations back, especially if it results in cheaper medical care and universal education.
I agree that our spending focus is terrible, though.
The most recent study suggests that European countries have higher class mobility than the US does. High taxes are not holding their populations back, especially if it results in cheaper medical care and universal education.
I agree that our spending focus is terrible, though.
That study was flawed to some extent it wasn't about class mobility it was about generational income.
When you adjust for the massive immigration coming into Europe from Africa and the Middle East and from new member state joining in you get a completely different picture.
Sure you can easily hack the system if you are from Poland or Romania just move to the UK for a few years and when you go back home you move up the ladder.
But when you look at local/native population the picture is completely different.
In the UK which traditionally had one of the highest class mobility figures in the world adjusted for immigration the middle class growing in England was mostly old money running out of it not people becoming richer.
And more importantly when you look at debt and net worth rather than just generational income the picture in Europe as a whole is dire.
When you adjust for the massive immigration coming into Europe from Africa and the Middle East and from new member state joining in you get a completely different picture.
Sure you can easily hack the system if you are from Poland or Romania just move to the UK for a few years and when you go back home you move up the ladder.
But when you look at local/native population the picture is completely different.
In the UK which traditionally had one of the highest class mobility figures in the world adjusted for immigration the middle class growing in England was mostly old money running out of it not people becoming richer.
And more importantly when you look at debt and net worth rather than just generational income the picture in Europe as a whole is dire.
My understanding is that most (informed) people who complain about the rich not paying taxes in the U.S. are talking about capital gain taxes, inheritance/state taxes and other forms of money-from-money types of wealth. They might also be thinking of accounting tricks and deductions that severely reduce the actual tax paid for most people wealthy enough to hire the legal and accounting help required to get the most of tax laws and loopholes. Income/pay taxes in and of themselves are fairly progressive.
A lot of the top 10% is caused by wealth disparity between states. Being in California or New York you can be the top 10% of wealth for the U.S., but just be doing "OK" (and not anywhere close to the top 10% of California or New York earners). So that said there needs to be clear distinction between the top 10% and the top 1%.
Top 10% is a little inclusive for "wealthy". That's $118K household income. I wouldn't really put two people making $59K in the "wealthy" range.
First of all, the top 10% is nobody's definition of "the wealthy" -- that's what, ~100k? That's a single professional salary of someone who is doing well. That's a double-income family, where both parents have middle-lower class jobs depending on the area.
"The wealthy" that everyone refers to are the 1% -- hedge fund managers, CEOs, not doctors and engineers. Certainly not 100k/year households.
And the article and your argument both miss a fundamental point, which is not simply about income, but about wealth. The top 1% in the US owns 40% of the wealth. And for the ultra wealthy, much of their gains are not through income but rather through capital gains which are by comparison almost entirely untaxed.
The 'perception' comes from reality: you shouldn't frame it as if there is this false perception that exists and ask us to help you find out why, assuming your position is true and moving on without argument -- it is a true perception, it just isn't only based on income and on that arbitrary cutoff.
Also, "mid-2000s" (the graph that you linked) was a long, long time ago in terms of wealth inequality. It was before the great recession which devastatingly altered the inequality landscape.
"The wealthy" that everyone refers to are the 1% -- hedge fund managers, CEOs, not doctors and engineers. Certainly not 100k/year households.
And the article and your argument both miss a fundamental point, which is not simply about income, but about wealth. The top 1% in the US owns 40% of the wealth. And for the ultra wealthy, much of their gains are not through income but rather through capital gains which are by comparison almost entirely untaxed.
The 'perception' comes from reality: you shouldn't frame it as if there is this false perception that exists and ask us to help you find out why, assuming your position is true and moving on without argument -- it is a true perception, it just isn't only based on income and on that arbitrary cutoff.
Also, "mid-2000s" (the graph that you linked) was a long, long time ago in terms of wealth inequality. It was before the great recession which devastatingly altered the inequality landscape.
The average income of the richest 10% is US$93,000
The minimum income to be in the top 1% is US$493,000
I'd love to see these figures broken down to 1% or .1% level to see if what you point out holds true
The minimum income to be in the top 1% is US$493,000
I'd love to see these figures broken down to 1% or .1% level to see if what you point out holds true
The average is heavily overweighted when looking at the top quantiles, since income is lower bounded by zero but effective unbounded on the positive side. A better number is to look at median income.
Interesting that the $1.5 million-a-year CEO is okay with the taxes. Maybe it's because he's British.
Does the $1.5M earner not add up to anyone else? His expenses are $6K a month ($72k a year, but call it $100k). His after tax income, call $800k. That leaves $700k unaccounted for - and he's talking about saving $15k for his kids college, or not being able to retire for 15 more years? I don't get it.
First thing that jumped at me.
He also says "I wish I could pay off the mortgage". From what he described, he should be able to pay it off in a year or two.
Doesn't add up.
He also says "I wish I could pay off the mortgage". From what he described, he should be able to pay it off in a year or two.
Doesn't add up.
We can't know what he is thinking, but I can imagine him feeling stressed if he want's to maintain his life style has a few children and wants to retire very early. It requires a big big nest egg to provide an income of around a million for the 50 or 60 years that either he or his wife will live after he stops working.
Retiring in 15 years requires quite a bit of investment every year if he wants to roughly maintain income at retirement, and many people would hope to be better off over time. Depending on how much risk he is willing to take, he might need to invest as much as $400,000 per year!
For such an early retirement he might be seeking an eventual portfolio of as much as $30,000,000 before he retires. Right now you can't count on much more than a couple of percent above inflation return on investments without taking risks that he might not be comfortable with.
Retiring in 15 years requires quite a bit of investment every year if he wants to roughly maintain income at retirement, and many people would hope to be better off over time. Depending on how much risk he is willing to take, he might need to invest as much as $400,000 per year!
For such an early retirement he might be seeking an eventual portfolio of as much as $30,000,000 before he retires. Right now you can't count on much more than a couple of percent above inflation return on investments without taking risks that he might not be comfortable with.
I'm guessing that his income grew rapidly and this may be his current "run rate" if everything goes well (or of course he could be inflating the # for PR purposes).
I get this weird feeling that that is the revenue line of his PR firm and not his after tax income. After tax income of $1.5M is insane. He would be among the CEOs he references, working all the time. A passive income of $1.5M from a service business? He is a greater producer than me, or perhaps almost anyone. If it is true or close though, very impressive.
He didn't say how many kids. Or how many mothers.
He said he put away 15k in a tax advantaged account for his child (singular). But agree - his annual income doesn't square with his desire to save more, bring his family over from the UK, or pay off his mortgage.
Edit - actually his family status says getting married next year, and rereading the statement about the education savings he could be speaking in the future tense.
Edit - actually his family status says getting married next year, and rereading the statement about the education savings he could be speaking in the future tense.
Also the part about not being able to pay off his 800k mortgage?
> We have more opportunity, but the price of living is unbearable.
The cost of basic groceries & clothing is down dramatically over the last 50 years. The price of housing could be too, but we've decided that it's more important to keep prices rising and supplies limited.
The cost of basic groceries & clothing is down dramatically over the last 50 years. The price of housing could be too, but we've decided that it's more important to keep prices rising and supplies limited.
Cost of healthcare has skyrocketed. As has housing, as you've mentioned. Those are much bigger expenses than groceries and clothing, so those lowered costs are not offsetting the biggest jumps.
40 years ago it would be seen as okay to have a middle class family in a 1600-1800 sq. ft. house. Now ostentation requires that it is 4000 sq. ft. with a garage bigger than the childhood home of either homeowner.
Does anyone else feel extremely guilty about this? When I read about the guy who takes two trains a bus and walks a mile to get to work, while trying his best to save just $1100 for a car, my heart breaks. The work I do is easy - I sit in front of a screen in my own house. When I go to a fast food restaurant and order from a woman in her 40s, who likely has kids at home, I can't help but feel a sense of guilt (and also luck). Even as I earn more money, I feel guilty spending it, so I end up just saving a large part of it.
Not sure there's a point or a problem or something I'm trying to solve, just wanted to share my feelings and see if others felt the same way, and hear any advice or thoughts they had.
Edit: I do take some (perverse) solace in the fact that it seems many extremely poor people across the world seem happier than the average wealthy office worker I know. Add up: long commute + winter weather (and darkness) + unfulfilling work + expenses that expand to their level of income = potentially a pretty unhappy person, even though they are high income.
Edit 2: Reading about how the low earner saved up for a $160 pair of shoes also gave me some warm feelings. Maybe that's why rich people do challenging, but relatively pointless things like hiking mountains. We don't have enough challenges in our daily lives, so we invent them so we can feel good about ourselves after.