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>$200K after taxes is not that much, especially if you have a house, more than one car, children, student loan debt, want to save, etc.

I understand your point, particularly if you are referencing a high COL area like SV. But this reads as a bit tone deaf when the median salary in the US is a shade under $40k/yr [1]

[1] https://usafacts.org/data/topics/economy/jobs-and-income/job...

Honestly I think a global or national percentile is not very informative.

If you make $40k in a small town, you’re doing okay. If you make $80k in a mid-major city like Indianapolis or Raleigh, you’re doing okay. If you make $160k in San Francisco you’re doing okay. From my own life experience, all of those feel like about the same amount of purchasing power after you’ve paid your bills.

However if you’re making $40k in SF your housing situation is borderline desperate. At $80k you’re just scraping by.

The US has really fractured into a few different economies, and it’s as hard to make comparisons of income, wealth, and quality of life between San Francisco and rural Kansas as it is to make comparisons between the rural US and rural Guatemala (or any number of other countries).

I agree 100%. That’s why I don’t think statements like “$X amount is really not that much” are very useful.

In many places in the US $200k is doing really, really well. Sometimes those arguments are still used in those areas, but I think it says more about lifestyle inflation than the ability to live on that income. (E.g., it’s not much IF you get a new car every few years and IF you have a mortgage on a 4K Sqft home and IF you send your kids to private school). The tone deaf comment relates to how those self-imposed lifestyle constraints are out of touch for most people anyway.

I don’t see an issue with saying both that $200k is not that much and that the median salary in the US is ABSOLUTELY TOO LOW. Both can be true and not tone deaf. Do you disagree? Or put another way: why did you find the comment tone deaf?

It can potentially be true but probably only to a certain extent. I find it tone deaf because the vast majority of people are getting by on much, much less. Which means almost by definition, it IS quite a bit. So to say it isn’t much comes across as oblivious to the way most people live, and potentially not aware of the problems that the average person faces. Would you complain to a person in a wheelchair about how bad it sucks to have to take the stairs to work even though it may still be true?

Giving the OP the benefit of the doubt, it may be COL dependent. But even in SV, $200k is nearly double the median household income and nearly 4x the median personal income. It reminds me of an article I read during the financial crises of 2007-2009 written by someone who was making the case that being a one-percenter doesn’t mean you have lots of money. She then later described her new Lexus payment, costs of private school, oversized mortgage etc. Both can be true iff that is considered a reasonable lifestyle for the average person. To be generous to the OP, the average way an American lives is probably not the best measuring stick (e.g., something like 60+% can’t meet an unexpected $500 bill. However, just like the OPs statement, I tend to think this is related more to lifestyle choices)

That makes total sense. I disagree with your takeaway but it seems like a valid one to have.

From my experience coming from homelessness type of poverty to making 6 figures, I have access to many things and don’t have to worry about food anymore. But. I still don’t have enough savings to live off of if I lose my job, am still one serious accident away from bankruptcy, etc. the way I’ve explained it is that I now have something to lose, not that I’ve gained all that much outside of benefits (I now have two front teeth!)

Maybe the point I’m trying to make with my anecdote is that making $$$ isn’t the same as having $$$, high CoL or not.

>the point I’m trying to make with my anecdote is that making $$$ isn’t the same as having $$$

This is very true but I feel like it misses the point. Making $$$ gives you resources to have many things that are outside the grasp of the majority. (Whether you squander that opportunity or not is up to you) There’s nothing wrong with that, but feeling like you are disadvantaged when you have access to more than most comes across as out of touch.

I think there’s probably some hedonic treadmill effects here. Thinking at one point in your life “if I can make $200k a year, I’ll be rich” and “feeling rich” once you get there may not align as often as we’d hope. But you likely live a rather “rich” lifestyle compared to those making $40k/yr. I also think there’s often comparative effects that reduce how it feels. $200k feels low once you realize your neighbor who owns a landscaping company pulls $400k.

I find it tone deaf because the vast majority of people are getting by on much, much less.

I said $200K isn't that much because I was responding to the article saying $200K is in the 1%-5% and those making that much use offshore tax shelters and other practices. $200K immediately becomes what, $140K or less after taxes? My original comment still stands; I don't think someone making $140K is in the top percentages of wealth and hiding their money in offshore schemes.

So to say it isn’t much comes across as oblivious to the way most people live, and potentially not aware of the problems that the average person faces.

I spent a decade working in the nonprofit sector with low-income, homeless, addicts, etc., with my first job at $24K and my last job in the sector at $55K. I think I'm somewhat aware of what the average person faces. You and others on my post have covered things adequately, but I would just add that sometimes things aren't about lifestyle choices/sometimes there are no "good" choices -- If you have to pay $3K for rent in an average apartment because it's close to your new job that pays more, really the only other option besides not taking the job is to move farther out, but then you pay more in transportation, insurance, parking, etc.

>I don't think someone making $140K is in the top percentages of wealth and hiding their money in offshore schemes.

I agree, this income doesn't feel indicative of those type of tax avoidance plays. But I think making $200k is still objectively "a lot", if for no other reason than it is statistically proving one to be in the top 5%. I don't know a better way to define it because the subjective scale will always hold true; someone in the top 1% will feel inadequate to someone in top 0.1% who will feel inadequate compared to a Saudi prince.

I guess what I'm trying to get across is that both can be true: 1) a salary of $X amount can objectively be high and 2) somebody earning $X can subjectively not feel like it's enough. The dissonance between the two is created because of the way we're wired to gauge our position relative to those around us.

Top 1% in the US is a hair over $500k/year. https://www.usatoday.com/story/money/2020/07/01/how-much-you...

Top 5% is around $160k/year.

Those are both household numbers. So, the top 1% wouldn't be unusual for a couple in mid-career working for a FAANG on the West Coast. But, definitely not normal or easy, especially anywhere else in the country.

Top 5% would be just about any dual-income, white-collar household in a reasonably sized metro area.

Pass-through isn't tax evasion, but as an example opposite to yours, I used to know someone who created an LLC and then bought things as LLC expenses (like computers, printers, etc) that were really for personal use.

Not necessarily a pass-through technique, but the example that pops to mind is the tax treatment of vehicles over 6500lbs GVWR. It's a major incentive for any business owner to over-spend on luxury SUVs when either a nice sedan (realtor, sales people, etc entertaining clients) or a smaller van/truck (many painters, florists, etc) would be more than sufficient.