Wages

[filkertom]

I can't help but be annoyed by this:

Ellen Parnell and her husband, Donald Parnell Jr., seem like the kind of well-off couple President Barack Obama has in mind when he suggests raising taxes on families earning more than $250,000 a year. A surgeon at Fort Sanders Sevier Medical Center in Sevierville, Tenn., he drives an Infiniti. They vacation at a beach resort every year.

Yet, right now he is working seven days a week. The car is more than a decade old, the vacation home in Sandestin, Fla., comes at a moderate weekly rate because members of Ms. Parnell's extended family own it. Her family of five would like more room than they have in their 2,500-square-foot home, yet they can't afford anything larger. The downturn has them skittish about paying for renovations.

"I'm not complaining, but the reality is Obama may call me wealthy, but I thought we were just good old middle class," says Ms. Parnell. "Our needs are being met, but we don't have a load of cash to cover wants."

It is a tricky situation in which some Americans find themselves after a long boom: They are by no means struggling, compared with the 98% of Americans who make far less, but depending on where they live and the lifestyle choices they have made, they don't necessarily feel rich, either. Worse, in their view, they are facing the same tax rates as those making millions. Some of the expenses are self-inflicted -- like private-school costs and conspicuous consumption. Others, though, are unavoidable, like child-care costs, larger health-care deductibles and education expenses, especially college.

The whole article is basically saying: Costs of living differ from one part of the country to another, with the implication that therefore setting tax rates at a certain income level doesn't work because it doesn't take other factors into account.

Now, there's no way not to have some sympathy towards the Parnells, although I wonder exactly how "unavoidable" child-care and college expenses are. And right above that, is mentioned the "self-inflicted" expenses of "private-school costs and conspicuous consumption".

Not to mention the vacation home.

Or not being able to afford anything larger than a 2,500 square foot home in a buyer's market. Heck, my manufactured home is around 900 square feet.

But then we get to the end:

For the Parnells, their perception of themselves is based on the math. The value of their house is down $60,000. Ms. Parnell says the couple's gross income last year was about $260,000. Taxes, premiums for medical care and deductions for Social Security and their 401(k) contributions cut the gross to about $12,000 per month. The family tithes $1,300 a month at their church. Their mortgage, second mortgage and payment on land they bought is nearly $4,000 a month. Other expenses, including their family car payment, insurance and college funds, as well as basics like food, utilities and donations to charities, leave them with about $1,200 left over each month.

"I'm not after sympathy. We are blessed. What I want is a reality check on what rich means," Ms. Parnell says. "I can pay my mortgage and I can buy some clothes. I'm not going without, but I'm not living a life of luxury."

"Taxes, premiums for medical care and deductions for Social Security and their 401(k) contributions cut the gross to about $12,000 per month"!?

First, that's a hell of a strange way to put it.

Second, "down to" $12,000 a month? In Tennessee?

The Parnells have a vacation home; they're tithing $1,300 a month; they have three mortgages -- the main mortgage, a second mortgage, and investment property; they are making payments on an Infiniti (ten years old, either it's used or they got the worst loan terms in history); they send their kids to a private school; they put away for retirement and the college funds of three kids; and they count charitable donations as "basics". They have (I guess they'd say "only") $1,200 a month left over -- an amount which would about cover my regular bills -- and they can't cover their "wants"? What the hell do they want?

(Yes, yes, I know, home renovations. You'd think they could print out a damn online coupon.)

Am I terribly screwed up in thinking one of us has a problem in perception of scale, and it ain't me?

ETA: Added the car payment, per ladysprite in comments.

Comments

[selenesue.livejournal.com]

She may not be rich, but she needs to get some perspective on what "poor" is.

[briansiano.livejournal.com]

Obviously, the problem isn't yours. But generally, unless they're in really extreme situations, people tend to think of themselves as being in the range of "average." They really don't understand that they are _rich_-- that owning a second home for vacations, and having an annual income of a quarter of a million a year, really does make them something they don't _want_ to see in themselves.

After all, if you're rich, then you face the fact that people are less sympathetic than they'd be if you were merely struggling. Sure, fine, these people have little reason to complain... but we all want to think that others would be sympathetic to us. And if you know you're rich, you know you can't expect that, because most people are worse off.

[benchilada.livejournal.com]

Amen.

[aiela.livejournal.com]

I can see feeling overwhelmed, but I can't help but think that people got themselves into this - mortgage, second mortgage, "land they bought", the vacation home they pay towards. And it probably is impossible to get out from under any of this in this market, but part of me still thinks "Yes, but who got you into this mess in the first place?"

My family lives on a quarter of that, and we've got a $1500 a month house payment and (one) car payment and we're still putting money into savings. Yes, my daughter's great-grandparents are covering her college fund, but she's also fully aware that she's going to be responsible for some of the cost of her education, whether that means loans or staying home for a year or two.

If I can have money left over at the end of the month, its because we haven't gotten ourselves so far into debt we are suddenly struggling when things get tight. Other than our house/car payments the only other debt we have is the laptop we bought yesterday, which we financed for 18 months with 0% interest, and will have paid off in that time.

"I have money and I deserve to live the good life" is screwing people over left and right and I just have a really hard time feeling sorry for people. If you're riding the line of what you can afford, and suddenly you can't afford it anymore, maybe you shouldn't have been spending so close to your limits.

[hearth-spirit.livejournal.com]

Halleluiah, sister. The culture of entitlement is the root of many of society's ills.

On a related mini-rant, and at the risk of kicking off a flame war, I'm firmly of the opinion that the "everybody is special and should only be praised" school of raising children which was very popular in the boomer years is one of the major causes of this general sense of entitlement.

No Sympathy for the Terminally Religious

[realinterrobang.livejournal.com]

Holy crap. Literally.

If they stopped throwing $15 600 (fifteen thousand six hundred) dollars a year down the god-botherers' greedy gullets, they'd have a lot more money left over at the end of the month. I can't frickin' imagine subsidising religion to the tune of fifteen and a half grand a year; that was more than I made a year for half my adult life so far.

Nobody who's stupid enough to throw that much money away on a church deserves to whine about taxes; frankly, they'd be getting more bang for their buck paying $15.6K more in taxes.

Re: No Sympathy for the Terminally Religious

[aiela.livejournal.com]

I'm an agnostic attending a liberal Unitarian Universalist church, (and a wealthy one, at that) and I still can't imagine giving them that much money. Their monthly contribution is more than what we were contributing -yearly- at our last church. (We've started attending a different church, and haven't joined/contributed yet.)

[ladysprite.livejournal.com]

Holy cow. You're not screwed up. And again, holy cow.

And if the car is over ten years old, why are they still making payments on it? And 2500 square feet? That's kinda huge. And $1200 a month after all expenses? That's a few *hundred* a week in spending cash. I'd love to have that level of financial freedom; I always thought that luxury meant being able to buy a paperback novel without having to think about whether that meant skimping on necessary expenses for the month.

For the record, I make... drastically less than half that. 2 cars, 1 house, a mortgage, in an area of the country with a drastically high cost of living, and husband and I think of ourselves as fairly well-off, financially.

At least, we did until he got laid off. :( But we're dealing with that, and we're not going to die. But reading stuff like this really irks the bejeebers out of me.

[filkertom.livejournal.com]

Thanks for noticing that -- I just tweaked the post. I'll be charitable and assume that they bought a used Infiniti. Because the alternative is that they got the Worst. Loan. Evar.

[peachtales.livejournal.com]

So, they tithe more to their church ($1300) every month than the have "left over" ($1200) every month? The tithing is in addition to charitable donations of other sorts.
Wow.

Seems to me, tithing less would solve whatever issue they think they have. If you're throwing that money at a church, wouldn't you rather put it somewhere it will actually make a difference to a lot of people? Food banks are running short all over the place, and there are many worthy charities.

So maybe my perspective is skewed since I am scared stiff about losing my job, and have been sick again, but ack. I could do just fine with that kind of cash.

[bryanp.livejournal.com]

If they are observant Christians then the traditional 10% tithe would be one of the last things they cut back. Also, many of those food banks are run by churches, staffed by volunteers from the churches, etc..

[bryanp.livejournal.com]

Second, "down to" $12,000 a month? In Tennessee?

Yeah, that is a bit silly. After all, I save so much money by not having to buy shoes. That, and all the sawdust and straw I use for flooring.

(Yes, I know what you meant, but I couldn't resist. ^_- )

[aulayan.livejournal.com]

Regarding the car. I don't think they're paying on the Infiniti.

As it said. "He drives an infiniti" than it stated "car payments on the family car."

Odds are, it's a second car. And not 10 years old either.

[filkertom.livejournal.com]

Which still gives them either a luxury car, or two cars. And, yes, I know very well that a two-car family is quite common and not "wealthy" -- but when one is an Infiniti....

[crwilley.livejournal.com]

Part of their perspective-skewing is probably related to this: They're not comparing themselves to you; they're comparing themselves to people richer than they are. Given how much faster the top 1% has risen than even the top 2-5%, they're looking up at the people on top and seeing the same gap that we are when we look at the Parnells.

Particularly, the issue about "I pay the same tax rate as a gazillionaire, but I'm not a gazillionaire myself" may be very real - there used to be more tax brackets, and during the Depression the tax code was apparently rewritten so that there was a bracket that may have applied only to John D. Rockefeller. Adding another bracket at the gazillionaire end of the spectrum may be a good and useful thing.

And, yeah, it would probably come as a shock to them that they're in that top 2-5% group. I remember being amazed when I found out where I fell in the spectrum, because I feel like I do live fairly modestly (manufactured home, used cars, public schools, latchkey kid), and my leftover money at the end of the month is way closer to $12 than to $1200. I can only dream of having the Parnells' cash flow problems.

[philady.livejournal.com]

Part of their perspective-skewing is probably related to this: They're not comparing themselves to you; they're comparing themselves to people richer than they are.

You are right on the money there.

It's that whole "gotta keep up with the Joneses" mentality. It's just that the Joneses that they're trying to keep up with are much more wealthy than the Joneses that we know.

[crysthewolf.livejournal.com]

Wow. So they have $1200 left OVER after all of the bills and everything are paid.

I make about $1200 a month BEFORE all of the bills and everything are paid.

Yeah, hard for me to feel sorry.

[hamadryad.livejournal.com]

People like those folks, who think college and tithing and vacation homes and more than 2000sf of house are necessities are in desperate need of a gauntleted cockpunch from reality.

[hearth-spirit.livejournal.com]

To be fair, I think that college is a necessity. That doesn't mean you can't have your child help you to pay with student loans, but more and more jobs are requiring at least an undergraduate degree.

That's not to say you can't do well without college. But it is saying that I plan to do everything in my power to ensure that my (child and future) children can go to college - in my budget, on the "cannot skip this payment" side of the ledger are college savings. It would be unfair of me to handicap my son's chances of future employment by marking them as optional.

And yes, it's completely true that we've chosen to have children. So, to play the other side for just a second, I'm open to the argument that reproducing is an optional expense.

On the other hand, I'm with you on tithing, on vacation homes, and on large houses.

I'll skip the instinctive and militaristic response to the gauntleted punch portion of your post. :)

[bayushisan.livejournal.com]

I wish I had the cash flow to tithe $1300 a month. I believe in tithing, and I believe in being charitable, for charity's sake. The way the family in question is talking though you'd think they were in the poor house.

[archiver-tim.livejournal.com]

Do new houses even start at less than 2,400 square feet?
Heck this 1955 house of mine is 900 sf. With space in the basement that could be usefull living space, add about another 400. Friend's houses with 1,500 to 1,800 sf look comfortable, allowing bedrooms that can hold more than a bed and side aisles around it. So, I would not put 2,400 at a lot of room, but not a huge house like we see being built/been built all over the place.

I would think that their food budget would be way out of whack in comparison to some of us, like maybe picking up dinner after getting kids from school or day care, other finest prepared, or regular near $78 dinning out trips for the adults.

Thing is, I don't think they see what they are spending on 'basics' could be less. Maybe $100/month to the lawn care guys could be called charity.

[gorgeousgary]

Do new houses even start at less than 2,400 square feet?

As a matter of fact, yes. About 40% of new homes are less than 2400sf. About 20% are larger than 3000sf. That leaves about 20% are in the 2400-3000sf range.

The smaller sizes, I believe, tend to crop up more in rural areas, and parts of the South and Midwest. Certainly on the coasts and in other fast-growing areas (or areas that were fast-growing) the larger sizes are (more) prevalent.

[valarltd.livejournal.com]

We have an 1800 sq ft house for 6 people. 2 paid-off cars, both less than 10 years old. We make 75,000/year and it doesn't feel as rich as it sounded back when we were making 10,000/year.

$1200 AFTER bills? we're lucky to have $120.

My first thoughts were "If you feel so strapped, get rid of the vacation home and quit the church. Also, send the kids to public school OR homeschool. Private school is just a way of avoiding minorities and you know it. You're welcome to try on my life"

[bayushisan.livejournal.com]

Given the option when I was a kid I'm not sure if I would have gone into private school. I have a LOT of bad memories about school in general but a couple of my favorite teachers were public school ones.

I can't really fault someone for wanting to send their kids to the best school they can. It's not about avoiding minorities, it's about doing the best you can for your kids.

Also, for a lot of people just quitting church isn't an option. Take me for example, if I had the kind of income that would allow for a $1300/month tithe I'd be doing that gladdly and without complaint.

I guess that's what seems troubling about the article Tom was talking about. Having it good and complaining it's not as good as you want it seems like sour grapes.

[jrtom.livejournal.com]

My family's situation is similar to this couple's--in some respects, anyway. My wife and I have three kids, and we're trying to save for their college while keeping them in day care. Our combined income isn't quite that high--and we're living in a more expensive area--but it's in the ballpark. We'd like to move to a larger house that's closer to where we work (ours is only about twice the size of Tom's, though). No second (or third!) house (in the Seattle area, are you kidding?). No tithing, but we have had some work done on our house recently.

The basic difference: we're not complaining. We know we're in better shape than almost everyone, really. Our jobs are reasonably secure. We have good health care, which I'm guessing these folks do also.

I do think that the cost-of-living discussion is worth having, and I also think that it's worth observing (in the context of changing the tax structure) that there are a decent number of people that make more than 10 times what we do...but my family may get some kind of stimulus check (again!), and we shouldn't. Seriously, we're not the ones who need help, not by a long shot. If anything, our taxes ought to go up, considering how much in the hole we are right now.

[pagawne.livejournal.com]

Gee, such problems we should have. She wants more money, she can get a job. Sounds like they are both healthy, she shouldn't be complaining.

[cara-chapel.livejournal.com]

Word.

[capplor.livejournal.com]

I find myself thinking of PDQ Bach's "Classical Rap"
Just trying to get along on the upper West-side.

[markbernstein.livejournal.com]

I'll give the article writer minor props for at least mentioning "the lifestyle choices they have made".

But this is the line that popped out at me:

Worse, in their view, they are facing the same tax rates as those making millions.

No, they have the same marginal tax rate as those making millions. A lot of people have trouble grasping this. For everyone, the first x dollars aren't taxed at all, the next y dollars are taxed at 15%, the next z dollars are taxed at twenty-something percent, and so forth. It's not a switch, where the moment you go above $250K, every dollar is taxed at the top rate.

If the Parnells' taxable income were $260K, and the marginal rate on income above $250K goes from 31% to 36%, then they'd pay an extra 5% on the last $10,000 only. That's a whole $500 for the year.

And that's not even the case. Their gross is $260K, which means that by the time they finish deducting mortgage interest, state and property taxes, and 401K contributions, they're well below $250K, meaning they get no tax increase at all.

[james-the-evil1.livejournal.com]

Not to mention FIVE KIDS.
Thank you for pointing this out 'cause this's the kind of lies & manipulation people use to obfuscate the truth about these stories.


I'd like to see the federal, state, and local governments all suspend the services they provide or subsidize with taxes shut them all down for one week. Just one week. Then see how much all these people who're crying about taxes still complain.

[james-the-evil1.livejournal.com]

Right now to get by I need a grand a month after taxes. If I had an extra $200 or $300 I could help my family more.
It's hard for me to feel sorry for people who're so ignorantly blind they're throwing $1300 a month down the drain at their church and who "ONLY" have $1200 a month left over.

[dornbeast.livejournal.com]

I'll join in the chorus of "It's them, not you."

I'd like to see them get a look at how middle-class people really live. The problem is, I don't know what that looks like any more than they do. Is it me, with no car, buying a 400 square-foot co-op in Seattle? Is it somebody renting in NYC for $1800 per month? Is it somebody in Texas, earning I-don't-know=what, and paying damnifiknow on a house of yea big and a compact car?

Whatever middle-class is, it certainly isn't these people.

[holzman.livejournal.com]

News flash for these people:

If the value of your house can be down $60,000 and that doesn't put your net worth into the red, you're rich.

If you have enough left over after paying bills to donate enough money to your church to buy a new car, you're rich.

If you're able to keep up on $4k/month in real estate payments, you're rich.

If after all that, plus even more charitible donation, plus a family car payment, savings, insurance and college fund, food, and utilities, you "only" have $1,200 left a month, you're rich.

These are precisely the people who should be paying more taxes. So nice of them to demonstrate it for us.

[realtegan.livejournal.com]

Amen. These people are RICH. They just haven't got any perspective about it at all.

Truth the tell, my household's take home pay is less than $3000 a month after taxes and everything, and I consider us to be pretty well off. $12000 a month is freaking RICH. They aren't middle class, not by a LONG shot.

[ldydragon7.livejournal.com]

While I can understand their concern about being 'lumped in' with bazillionairs, I can't really see their plight. Their monthly spending money is just a little bit less than what I have to live on per month, not counting the 8,500 (and growing) student loan debt I am currently acuminating. I ran out of savings money and can only finance getting my degree through student loans. I work 42 hours a week, plus take two masters classes and since I have two part-time jobs instead of a full time job I have no heath benefits at all. At the one job I don't even get vacation/sick time--if I call out sick or if we're closed for a holiday, I just don't get paid. For the last few years my idea of a vacation has been an extended weekend at my sister's house.

I'm getting by and I can usually afford to buy a book or dvd every now and then, or go out to a restaurant with friends. I'm not complaining (or at least not often) and once I get my Masters (in library science) I should be able to get a full time job at higher pay with benefits, though given all the budget cuts, public libraries are having a harder time of it. It was my choices that led me to my current situation and despite my worries, I am content with it (and content with looking forward to a career where I'll probably only make an average of 30,000-something a year- ever).

So if I can be content, they should really take at closer look at their situation and realize that even with higher taxes and even if they have to make some lifestyle changes they are going to be fine. (oh and on the whole college thing, I'm the youngest of three and my parents(they both worked, but my mom the public school teacher was the real bread winner-just to give you an idea of their tax bracket) paid for my college with the following stipulations 1) I had to go to a state school 2)either I received a decent scholarship or I'd have to commute-they could cover tuition or housing not both and 3) I had to get a summer job and contribute 1,000 each year- I did and it worked.)

[audreydorland.livejournal.com]

Didn't you see what she said? Right there? "What I want is a reality check on what rich means", she said. She wants a reality check.

[alverant.livejournal.com]

The local sci-fi club has a party/meeting every month. Last Saturday it was at a new location. To get there I drove through the richer part of one of Chicago's western burbs (the party was west of that area). The houses were nice but were clearly way too much house! I saw ones that looked like Frank Lloyd Wright designed them, had matching statues out in front like the NYC public library, and I have to point out it couldn't have been easy building along this road because of the hill we were on. I kid you not, some 2 or 3 story houses were so far down the hill the roofs barely reached street level!

The only satisfying thing I saw was the amount of For Sale signs. Personally even if I had the money to buy one outright I wouldn't. It's so secluded the houses are probably so big to keep the people living there from going stir crazy.

[mimiheart.livejournal.com]

Poor, fucking, babies.

I've got about $100 in my account to last me and my husband and the three kids for the rest of the month.

We've got one car--a used Kia. I have a kid at private school, but that's only because he has a full scholarship, next year he's going to public because he only got a 3/4 scholarship and we couldn't afford the $200 a month left over.

$1200 left over to cover their "wants"? I don't have enough money each month to cover my needs half the time. They can cry me a goddamn river.