There are too many numbers for me to really go through this, so I can’t really make many empirical criticisms. But I live in exactly the kind of “high-tax, high cost of living” areas this article refers to (I mean, literally, one of the places they list), and this flies completely in the face of my everyday reality. My household makes well under half the threshold they’re discussing here, and we feel much, much better about our finances than we probably ever have before.
So where’s the disconnect? I can only think of a few things :
1. We don’t have any kids, which leads me to suspect this model assumes you are spending a crapload of money on two kids. Now, I’m not under the impression that kids are cheap, but I’m also well aware of the tendency for rich people to describe luxuries for their kids as absolute necessities. I mean, it’s a small line-item, but four thousand bucks for “after school activites/camp”? After school activity = pour yourself a bowl of cereal and watch cartoons. Done, and I just saved your four grand.
2. This implies that everyone has to own a home, and from these numbers, an expensive one. The people in this model are paying over forty thousand dollars a year, total, on their mortgage, mortgage insurance, and “maintenance”, which comes out to about $3473 a month. But for just $2,300 a month, you could live in this awesome three bedroom, two bathroom townhouse in one of the nicest parts of one of the richest counties on planet earth. “BUT WHERE WILL CASSIUS, OUR GOLDEN LABRADOODLE, BE ABLE TO CHASE WILD RABBITS????” No, you won’t get the crazy mortgage interest deduction (which probably shouldn’t exist in the first place), but you will save thirteen grand a year. Again, is this BETTER than owning your own McMansion? Not necessarily, but it certainly doesn’t push anyone’s lifestyle into an area where I feel like they desperately need tax relief.
3. These people pay $7600 a year in car loans for two cars. My brand new car costs me $3,120 a year, which means you could get two of them for less than what these people are paying. Or you could get a used car (or at least not two brand new ones), and probably pay significantly less than this. Or, once you pay off a car, you could maybe not go out and immediately buy a new one. You know, like the middle class people you aspire to be.
4. To the guy in this model paying $5,000 a year in parking — it’s called a park & ride, good Lord. Learn it and love it.
There are probably other quibbles in here, but it’s hard for me to quickly break down $13,000 a year in “staples” and know if that’s realistic. But even if all that stuff is fine, what’s the lesson here — the good life is expensive? The kind of security most Americans don’t have, and will never have, costs a lot of money? That’s not news to anybody living in a house that brings home anything closer to the $50k-ish median income, and you’re not going to generate a lot of sympathy from the salt of the earth because two brand new Toyota Camrys and a place to park them so you don’t have to take the dirty, dirty bus is expensive when you live in Huntington, NY.
Plus, for the twenty billionth time, if you increase the marginal tax rate for a house earning over $250k a year, you’re only increasing the taxes paid on every dollar over 250k. It’s still much better to make more money. Likewise, if you cut it, your tax bill barely changes unless you’re making more like 350-400k, in which case you’ve obviously got a lot more to work with.
Finally, the idea that living in Fairfax County or Greenwich, CT, or any other beautiful, high-tax, high-service suburban enclave within earshot of a huge city has some unbearable cost attached to it that makes every dollar worth a quarter is just the latest load of crap from rich people to try to justify their totally awesome lifestyles, which I don’t begrudge them at all, because I am totally trying to get in on it. Seriously, I don’t think I could possibly be a better example — I moved from Cleveland, Ohio to Fairfax County,VA in 2008. My rent immediately doubled, yeah, but I also started making WAY MORE MONEY, and living in a place with amazing services, good schools, low crime, amazing parks that have swimming pools instead of crackheads, freaking subways that actually go useful places, and other stuff funded by all those pesky taxes that make this a “high tax area”. My life is twenty gabillion times better here than it was in Ohio, and it’d take me years to make $250k. And yet, since I moved here, I’ve watched people tell me over and over again that not buying a home is “stupid” because I’m missing out on the mortgage interest deduction, while simultaneously complaining about how impossibly high their property taxes are, and how it’s unsustainable for them to maintain their standard of living. Well, which is it? Are you living beyond your means or not?
If the only point being made here is that making a quarter million dollars a year doesn’t necessarily give you the ability to spend recklessly, or to get whatever you want, then fine. But that’s not much of a point, since that’s true of pretty much anyone who didn’t negotiate syndication royalties for “Two and a Half Men”.