Nov
5
The New Divisive Line $250,000
November 5, 2008 | Comments Off
The recent election says something to me: if you earn more than $250,000 you are “rich” and you must pay for it. Some “rich” people would do it happily. Some would not do it happily but will have no choice in the matter. The question is why and how did this happened?
First of all, I must say that $250,000 of family income is a very achievable number. Most of my college educated friends with around 10 years of experience are making around or more than $125,000 a year. Some of them are in double income families: simple math puts it above $250,000. Some further career growth, salary increases and inflation adjustments will put them way above the $250,000 limit.
So what does this tells me?
· Government Dislikes Double Income: Could it be that people have elected to reject double income families? I think this would be an economic mistake. A double income family creates double the GDP in the society plus helps create a babysitter job.
· Chauvinism in Action: Men just want women to stay at home or have lowly paying jobs. Maybe women like it too.
· People Don’t Know What To Do With Money: Maybe people just don’t care. Once you buy your iPhone and your designer jeans, plus have some beer money in the pocket, you do not need anything else. People just don’t want it.
What about the $200,000 or $250,000 Joe The Plumber?
It occurs to me that there are very few jobs paying more than $200,000 a year. This leaves Joe The Plumber as the only possibility. I do not know if you have noticed, but many professionals (including plumbers and electricians in my area) charge in excess of $125/hour for contract work. Good ones can charge $200/hr. Simple math would tell you that after doing 200 working days in a year at $125/hour you exceed the single earner limit. If you are good, you exceed the family income with only one Joe The Plumber. Add a helper/assistant/employee, and you see how poor Joe The Plumber starts to say goodbye to his money. So what could this means?
· Society doesn’t like Joe The Plumber: Maybe there is something against small business owners.
· Society Wants More Plumbers: Maybe society wants Joe to stop working that hard, and let someone else take a share of his job — only that there is no one to take it.
My major concern is what would motivate people? Once you reach “the number”, what would motivate people to work harder if the government wants to take most of it away?
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