All's not well for the well-to-do
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What a terrible time to be well off.
Notice I said well off, not rich. It's always a good time to be rich, except perhaps when the tumbrels are rolling toward the guillotine, the mob is calling for your head, and your visa to Switzerland got lost in the mail. But to be merely affluent during this economic crisis - you're doomed.
Who's affluent? Quite possibly, you. I say you are well-to-do if, like 1.6 million Americans, you fall into the IRS's 33 percent marginal tax bracket, meaning that you and your spouse make between $200,000 and $357,000 in annual taxable income. (For perspective, the median American household income level is about $50,000.) Or if you are one of about 4 million Americans who fall between the top 2 percent and the top 4 percent in terms of income. The top 1 percent - the one-plus-million who fall into the highest, 35 percent tax bracket - are really quite rich.
Why does it stink to be well off? Well, on the discretionary spending side, you have to make some adjustments. Things you used to do, such as eating at nice restaurants, paying someone else to mow your lawn, or enjoying a theater subscription - those will go. You'll learn that Stop & Shop club soda starts tasting pretty much the same as San Pellegrino. Payments that weren't altogether necessary, like psychological therapy for the "worried well," or orthodontistry for children with perfect teeth - they'll go, too.
I'm just happy I had those enamel implants put in above my gum line before my mutual funds collapsed.
There are other perquisites of being well-to-do that can't be so easily foregone. The people I am writing about tend to live in communities where the public schools are excellent, or they send children to private schools. And to private colleges. This isn't like the lawn service. Where are they going to come up with $50,000 a year, when all those funds that the grandparents helped out with are suddenly in the tank?
Suppose you want your children to attend an excellent private university like Tufts? "We've heard from people who are concerned," says executive vice president Patricia Campbell. "People across all income strata are reassessing what they are able to do." Like people, there are rich colleges, like Harvard, Yale, and Stanford, and there are colleges that are merely well-to-do. "There is stress on every single source of revenue," Campbell says. "That includes endowments, which are down, annual gifts, and grants from the government, which has its own fiscal problems."
Tufts and other schools want to help their existing students first. Will there be as much aid money for next year's entering freshmen? Campbell says it's too early to tell.
There is more bad news. You are welcome to compare the tax plans of the two presidential candidates, which have some significant differences. (Obama is overtly soak-the-rich. McCain dreams that he can preserve the 2001 Bush tax cuts.) But one thing is for certain. When the next president and the Democratic Congress try to pay for their wars and their bailouts, they will be coming after the 33 percenters.
"There will probably be a tax hike regardless of who is president," says Tax Foundation economist Gerald Prante. "They have to go where the income is. They could raise taxes on the people at the bottom, but there's not enough money there, plus you would have a political backlash."
The genuinely rich? They couldn't give a fig. For one thing, they aren't exactly hurting in the downturn. Jamie Johnson, an heir to the
The Gotrocks are so flush, they're voting for Obama. A recent survey from Prince Associates, a market research firm specializing in wealth, reports that the merely affluent intend to vote for McCain. But the really rich, families with $30 million of net worth or more, plan to vote for Obama. Why? Because the super-rich don't care about taxes. They care more about social issues, Supreme Court nominations, and healthcare policy.
They don't object to redistributing wealth, because they have so much of it. You, on the other hand: You're doomed.
Alex Beam is a Globe columnist. His e-dress is beam@globe.com. 
