Tag Archives: finances

I got this great article from one of my listserves that talks about the upper middle class, so-called HENRYs–”high earners, not rich yet”.  They profiled an Asian American family, although that’s not the main point of my post.  The article basically addresses the fact that the HENRYs are affected by tax cuts and don’t feel rich.

My opinion is this: I understand that these people are not wealthy and will have to continue to work.  They don’t make enough to retire, and they need to continue showing up every day to their office to do law, medicine, finance, or whatever it is that they do.  I do think that it will affect HENRYs.  But I don’t think they’re being “penalized.”  I think they’re just being asked to pay their fair share.  Right now we’re running a deficit because people don’t pay a fair amount.  The HENRYs make more than 98% of all Americans.  It’s hard for me to see how they struggle like people who are right in the middle.

 

For example, on page 2, they talk about a guy named Selden in LA who pays $1680 a month to send two kids to daycare, which is around the same price as daycare in Portland.  Assuming his $388k a year is taxed at 40% (which is roughly what he’d be paying under the Obama plan..I don’t know what his local taxes are), he has $232k in cash every year, $19,400 in cash per month.  With money towards the college fund of $750 per older child and $1680 daycare and his $3,100 mortgage,  he still has $13,120 in cash every month.  That’s $13,120 for food, entertaining, savings–even more if he has a retirement account that deducts pre-tax.  With the new child, his costs go up by $1,000 for daycare and $750 for college, but that’s still $11,370, which is more than most people make pre-tax, pre-mortgage, and pre-child expenses.  He isn’t going to be buying yachts or funding startups with that money, but he’s comfortable.  Even with this tax increase, he won’t starve or lose his home.

 

I totally understand that people have different lifestyles.  As someone in business myself, I understand that certain lifestyles and even professions require certain expenditures and that the blurring between needs and wants is different depending on your station in life.  I just think we’re all just going to have to tighten our belts for a while.  The economy is bad, people are losing jobs, and we’re going to have to make sacrifices.