The New Middle Class

It's basic human nature that, no matter how much money you make, it'll never seem like quite enough. You can always find something more to spend on. Even poor dirt farmers in Africa pine for that little bit of extra dirt needed to tide them over for the year. And it's the rare person who can easily set aside money for a rainy day, and we generally need to trick ourselves into saving, using 401k plans and automatic transfers to savings accounts.

And yet, just because you don't make enough money for the lifestyle you've become accustomed to, doesn't mean that you're just as bad-off financially as everyone else that doesn't make enough money. And so it really upsets me to read stories like this: Wealth-Less Effect: Earning Well, Feeling Otherwise

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.
[....]
"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."
[....]
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.

But of course, the problem isn't that they don't make enough money. The problem is that they spend it all. And the only reason they're "wealth-less" is because they choose to spend all their money. And sure, all of us share certain necessary expenses. But that's obviously not the problem for these people. A family making $40k is not running $220k in debt every year due to these expenses. The additional spending is all them.

Living Like Rock Stars

And what these "middle class" people don't seem to understand is that most other middle-class folks don't take real vacations, send their kids to private schools, drive Infinitis, or indulge in the vague "conspicuous consumption" that the Parnells do. And of course, many of them also don't have proper healthcare and when they send their kids to college, they have to get loans to pay for it. These are all lifestyle choices that can only be made by folks in the upper-class.

And that's the thing, there's "struggling" and then there's struggling. And while people like the Parnells are struggling to live a good lifestyle, other people are struggling to keep their homes and feed their families. And for as much as societal changes have made it more difficult for folks like the Parnells to retain wealth, those same changes have made things even more difficult for those less fortunate than them.

These people might have to pay a "moderate" weekly rate to relatives for their beach vacation home, but the real middle-class is having trouble with their primary home. Oh, and did I mention that they make payments on land they bought? Yeah, they own land, in addition to their house; and they classify the payments to this as non-discretionary. Forgive me for being less than sympathetic to these upper-class middle-classists.

Reality Check

And one thing this article left out: The couple says they make about $260,000 annually. And that means that their tax bill under Obama's plan will only go up about $400 or so.

Yeah, I'm sure that will just crush them; particularly seeing as how the article says that after paying their bills, charitable contributions, 401k contribution, college fund for their kids, and the loan for the land they bought, they only have $1200 left over each month; which is still more than someone working full-time at minimum wage earns. In fact, combining the $1300 they tithe to their church and their $1200 in extra income leaves them with an amount that is over 88% of the median after-tax income in Tennessee. Poor, poor Parnells. How will they ever survive?

And that's the thing: For as much as the article emphasized how Obama's policy wrongly puts these people in the category of the "wealthy," it never actually states what that policy is. And yet again, a journalist seems to not understand that the tax increase is only on the amount over $250k; not the full amount. And, in fact, the article wrongly suggests that the Parnells are "facing the same tax rates as those making millions." But they're not. Their income will hit the 36% rate, not the top 39% rate. And even then, their marginal rate will be far, far lower. This article is not only laughably out of touch, but it's factually wrong.

But again, we're only talking about them paying $400 or so more a year. And so now, thanks to that jerk Obama who thinks these people are wealthy, they'll only have $1167 left over each month. Ms. Parnell is quoted at the end saying "I'm not after sympathy. We are blessed. What I want is a reality check on what rich means." And I agree completely that a reality check is in order, but don't think we're the ones who need it.


Irony Alert: Only in an article like this would the Wall Street Journal suggest that health insurance and college education are necessities. But when it comes to liberals wanting to guarantee these sort of luxuries for everyone, they become anti-capitalist demands of socialist fools. It's as if only the rich are entitled to these extra perks, while the rest of us schlubs should be lucky to get anything. Some folks are simply more equal than others.