Why $1,700 Means Joel Stein is Rich

With great wealth comes great responsibility. So what should I do with my $1,700 tax-break savings?

By Joel Stein Sunday, Oct. 10, 2010
    • Photo-Illustration by John Ueland for TIME

    I've always believed the rich were different from you and me, but it turns out they're different only from you. When I listened to the nuanced economic debate over whether the Bush tax cuts should be kept for rich households making more than $250,000, my overwhelming response was, I'm rich! My total income for 2009 was $288,115, placing me among the richest 2% of Americans. What happens to my taxes will affect the future of this nation, unlike what happens to your taxes, which will affect only you and whatever the equivalent of Whole Foods is where you do your shopping.

    The most embarrassing thing about finding out that I'm rich is realizing that I've been living wrong. I drive a six-year-old Mini Cooper. I own generic-brand olive oil. I am still, embarrassingly, married to my first wife.

    President Obama says my money and I are so important that America could significantly lower its deficit if I paid 39.6% in taxes instead of 35%. The Republicans argue that my money is so crucial that taxing it any higher could make the economy worse. They worry that it could hurt small businesses. This is true, especially in the case of Steinacopia Inc., the business I set up so I can expense everything I do. Steinacopia Inc. is among the smallest, most vulnerable companies, since it's just me.

    If the Republicans get their way, I want to spend my tax break in the most patriotic way possible. For advice, I called Mark Zandi, chief economist for Moody's Analytics, who believes it's safer for the country if rich people like me keep our tax cut for now. Without the tax cut, I would have to pay an extra 4.6% on that $38,115 that I made over $250,000, which would be $1,753.29 more for the IRS. "Seventeen hundred dollars isn't a lot," Zandi said in a way that — though I'm new to this — seemed like how rich people let each other know they're rich too. I suggested I might save the $1,753.29 for my son's college fund, but Zandi thought that was a bad idea since America needs help right now. Educating kids is great but not as great as giving every old person money and invading other nation-states.

    Zandi said if I wanted to do the most good in the short term, I should create a job. "You're working really hard and having a hard time managing all these requests for columns," he said in a way that implied Moody's Analytics doesn't bother studying the state of journalism. "Have a good temp assistant come in once or twice a week and do your expenses. It's not high-value stuff like what you're doing." I think he honestly meant that last part.

    I interviewed Igor Hiller, who recently graduated from UC Santa Barbara and who I knew was looking for a job because he interviewed me for his college paper, and there's only one reason people do that. I thought Igor would make an excellent assistant, largely because I really wanted an assistant named Igor. When I explained that I wanted someone to make all my reporting calls for me and send me the quotes, Igor said, "You would want me to do your work for you and not tell anybody? I don't see anything wrong with that."

    To figure out my legal responsibilities for Igor, I called Mike Foster, a tax lawyer at Venable LLP. After hearing the specifics of my tax returns, Foster informed me that I am not rich. The debate is over people who report more than $250,000 after deductions, and I had only $182,532 in taxable income, thanks to my giant mortgage and high income and property taxes. Which is outrageous, since the $288,115 I claimed to have made already didn't include all the income Steinacopia deducted as expenses through the very legitimate dinners and trips Steinacopia took me on. Even more confusing, my income was high enough that I had to pay the alternative minimum tax, which makes the Bush tax cut irrelevant. Or something like that. Foster wasn't sure. "I don't even do my tax returns anymore," he said. "I don't know any tax lawyer who does their own tax returns. The forms are Greek even to us."

    Having lost my status as a rich person through ingenious accounting practices that I hope the IRS isn't reading about here, I felt the old pressures of the middle class. I fired Igor immediately — or whenever it is he reads this. I kept my car, my olive oil and my wife, all of which have lost their luster, mostly because she refuses to let me combine all three. I feel less important knowing there are people who report a greater income than I do after expenses, deductions and adjustments due to the alternative minimum tax. But I feel more sure than ever that we should totally raise their taxes.

    This article originally appeared in the October 4, 2010 issue of Time magazine.