One of the (many) things that’s frustrating about the current debate over extending the Bush tax cuts is the meme that, well, 250 grand just isn’t what it used to be. Why, in some places it’s just enough to make ends meet! Media Matters carries an excellent take-down of an LA Times fluff story that makes that point. Useful, perhaps, as part of a class exercise on inequality in the US.
Update: Philip Cohen has an excellent breakdown of family budgets at median and “wealthy” points here.
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There is a class-based point to this. By not raising taxes, the government must continue to finance itself with Treasury securities (bonds, bills, and notes). Since the Top 5% of net wealth holders (according to estimates from the 2007 Survey of Consumer Finances) hold nearly 90% of the bonds, then this makes sense from an elite ruling class perspective. “I’d rather receive interest on my bonds than pay higher taxes.” Now, I can convince the “little guy” of why higher taxes on the rich are a bad public policy choice by showing how hard it is to make it on $250k.
-The “build america by bonds” program is a version of this to prevent tax increases by state and municipal govts. Tax increases could harm one of the most highly traded securities on Wall Street.