Based on President Obama’s masterful handling of U.S. finances at the macro level, his adding $6 trillion to the national debt in only 3 1/2 years has to be applauded. What an achievement by this financial genius.
Just think, from George to George (i.e. Washington to Bush), all these presidents came up with a total of $10 trillion in a couple of centuries. I say give him four more years and see what the national debt becomes. Can’t wait.
But, how does he do at the micro level? At the individual level, where he wants to increase the taxes on a couple making $250,000 or more, he should consider where the people live in order to justify increasing their taxes.
For instance, if you live in a small town in Mississippi or Alabama, with this amount of income, you probably own the town. But, if you live in Manhattan it is a different story.
When one adds up the federal, state and city income taxes, it is about 50 percent. So, the couple has about $125,000 to live on for the year. Let’s say they have one child and rent a two bedroom apartment for $5,000 per month.
This is $60,000 gone. Now they are at $65,000. If both parents are working, they need a nanny…let’s say $15,000 for the year…leaving $50,000. But, wait. What if their child is of school age and they are dissatisfied with the public school system and decide to send the child to a private school in Manhattan? The New York Times of Aug. 24: “Any parent of a private school child will tell you that tuitions are painfully high – and getting worse every year. Many New York City schools are approaching the $40,000 mark.”
So, for this exercise I will use the private school deduction instead of the nanny. (Sorry, nanny, you have joined the ranks of the 23,000,000 unemployed in America.) So, the $65,000 is decreased by $40,000.
This leaves them with $25,000 for food, clothing, garage parking (they own a car), medical, theatre tickets, new furniture, tips, savings, life insurance, yada, yada, yada. Leaving them with nada at the end of this $250,000 trip.
Are they rich? In Manhattan, they are middle class.
Does this financial genius understand the micro economics in different U.S. locations? A rhetorical question.
John Messina
East Williston
