In the Big Apple, $400,000 feels like a lot less than it does in Harlingen, Texas.
In any metropolitan area, however — from Harlingen to the Big Apple — $400,000 is still a high income. The top 20 percent of earners in the New York City metropolitan area earned over $132,000 in 2011, according to Census Bureau data. In the Brownsville-Harlingen, Texas, metro area, only the top five percent of earners earned more than $127,000.
[CHARTS: Cities Where Income Is Growing Fastest]
Whether the White House's shift to a $400,000 cutoff for tax hikes is a big or a small change is a question of perspective. It affects only a small part of the population, and it would likely make for a small impact compared to the entire federal budget, according to Joseph Rosenberg, a research associate at the Tax Policy Center.
"In a lot of sense the difference seems small in the context of the entire debate. Any one change is
almost by definition sort of small," he says.
The president's proposal would raise $1.2 trillion over 10 years, down from his initial plan to raise $1.6 trillion. Meanwhile, House Speaker John Boehner's framework, which aims to raise rates on income over $1 million, would raise $1 trillion. The $200 billion over 10 years that separate those two proposals is a paltry sum compared to federal spending. In fiscal year 2012, for example, the government spent around $3.5 trillion.
[READ: Middle Class Can't Afford Homes in Half of Major Metros]
However, a few hundred billion of dollars are a weighty matter in the context of the fiscal cliff debate.
"It's small in absolute terms but meaningful in relative terms as a part of this sort of negotiations that are going on," says Rosenberg. "A few hundred billion dollars over ten years is a sizable portion of what the debate is about."
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Danielle Kurtzleben is a business and economics reporter for U.S. News & World Report. Connect with her on Twitter @titonka or via E-mail at dkurtzleben@usnews.com.
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