Who Actually Earns $400,000 Per Year?

by Emily Guy Birken · 8,402 comments

Surgeons

After the unending media coverage of the fiscal cliff, it was a relief to everyone when a last-minute compromise was reached. In particular, the most reported-on compromise had to do with the extension of the Bush-era tax cuts. Those cuts will remain in place permanently for any individual making less than $400,000 per year, and for couples earning less than $450,000. Those fortunate few who make more than that amount will see their rates rise from 35% to 39.6%.

The news about this particular tax rate increase got me wondering: what professions can expect to earn that kind of money? Since I don’t personally know anyone bringing home $400,000 per year, I decided to find out what kind of jobs command such high salaries:

1. The President

Perhaps the most famous $400,000 per year job is the leader of the free world. The office of president not only pays a $400,000 annual salary, but also provides the president with a $50,000 annual expense account, a $100,000 nontaxable travel account, and a $19,000 entertainment account.

There are some obvious downsides to this particular career, however. Besides being very difficult to get, the job is highly stressful, and advancement post-office can be considered somewhat iffy. And, of course, you can’t expect regular raises: the last salary increase for the commander-in-chief (from $200,000 to the current rate) was in 2001. Prior to that, the previous raise (from $100,000) occurred in 1969.

2. Surgeons and specialists

Even a local general practitioner can expect to pull in over $100,000 per year, but the real money in medicine is reserved for those who specialize. Anesthesiologists, heart surgeons, and brain surgeons can all expect to make up to $400,000 per year at the height of their career. Plastic surgeons can make up to twice that amount.

3. CEOs

The median salary of a Chief Executive Officer is over $700,000. These directors are in charge of both short- and long-term profitability for their companies. CEOs generally have to know the industry backwards and forwards (although there are certainly plenty of counter-examples), and need to have worked their way up over many years.

4. Wall Street Bankers and Lawyers

If you work in either finance or finance law, the place to go for fat paychecks is Wall Street. According to an October 2012 report, “the average salary of financial industry employees in New York City rose to $362,950 in 2011.” While that still falls short of the mark required for the higher tax bracket, it’s important to remember that this figure represents the average (meaning some people are making more) and that there have almost certainly been raises in the past year and a half.

The Top Percent of the Top Percent

These high-income earners are really rare. Consider the fact that most articles listing the highest paying jobs in America don’t even include any professions with median salaries of $400,000. Those individuals making $400,000 per year are in the top one percent of the top one percent — and often, they’re also public figures.

Thankfully, even though individuals in this bracket are few and far between, the government estimates that raising the tax rate on this small group will raise about $600 billion in new revenues over the next decade.

Not bad for a group that small.

What other professions that earn annual incomes of $400,000? 

how to earn a high salary

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{ read the comments below or add one }

  • Stevendad says:

    Again, I have to admit SH, despite my nearly universal disagreement, fueled the whole discussion. Did you give up or give in to superior logic Steven H? Why DO you hang out with that sadist? ( Asked of the masochist) “Beats me!”

  • Peter says:

    One other great point to make about income inequality. Those who push for much higher taxes on the rich as the solution often quote Piketty’s work as the “evidence” for the need for this measure. We have already debated his work tremendously and poked the holes in it – as well as talked about the merits and validity of some of his arguments. However, since this one economist is so often quoted for the “other side” of the argument – I think it is important to dive deeper. First, as we have discussed, he makes two huge errors. One is his view that the economy is a zero-sum game. The second is looking at income on a pre-tax level. The reality is – if you look at income on an after-tax level, income disparity has barely been rising. In fact, due to the government’s recent efforts to legislate equality, disparity has actually been DECLINING over the last 10 years.

    To me, after-tax income is far more important as this is what truly affects people’s lives. This is people’s reality. And all this data shows that income disparity is not increasing. Good news for all of us.

    I think the other point that is so lost in all of this is that when the super-rich get rich, the rest of society is often benefiting. People have access to free utilities and entertainment like never before, as well as amazing conveniences that make our lives easier and more enjoyable. The people that have created these apps, technologies and products have become quite rich. And our lives have been enriched at the same time. The jealousy and hatred for the rich is so misguided as these are the people that often have made our lives better. Sure, there are some people like hedge fund managers who we could be critical of – but they do not make up the majority of the rich. People don’t get rich providing services or products people don’t want. It’s certainly to blame for my own success….I have improved people’s lives tremendously and as a result, my life has been rewarded as well.

    • Stevendad says:

      I’ve made this poin in the past and agree. What matters is what you SPEND not make. This includes government benefits. It is MUCH more level, but defeats control agendas of the Progressives.

      • Peter says:

        Politics are so dependent on creating an enemy. An “us vs them” mentality. Charlottesville is just more evidence of where all this division leads us.

  • Peter says:

    And Trump idiotically won’t explicitly condemn white supremacists…. sigh…. Anyway, back to the economic stuff. A few facts that I saw that are interesting food for thought.

    So far in 2017, 5300 retail stores have closed. That’s 200 a week. This number is rising. More jobs for the unskilled vanishing into thin air.

    There are 6.1 million job openings in the USA that remain unfilled. Interesting when you consider there are about 15 million people still unemployed.

    In 2014, the top 1% of tax payers (1.4 million people) paid $543 billion in taxes. The bottom 95% (132.6 million people) paid $550 billion.

    95% of the companies in the S&P 500 have underfunded pension plans. Just like the Federal government.

    • Stevendad says:

      Trump finally explicitly condemned white supremacists. Too late for some, but it doesn’t matter what he says or when to the political zealot. It’s a shame the media and left groups didn’t just ignore the idiots and their stupid march. Then it would have been a bunch of guys (mostly) chanting in a park for a couple of hours then disappearing back into their holes. Instead they are given publicity and more fuel for idiots to follow them…

      Brick and mortar feel like they are going the way of the buggy whip and slide rule. But they aren’t as online is still a fairly small (though rapidly growing) segment. The Great Internet Catastrophe that seems inevitable may change this…. Time will tell.

      Debt and unrealistic promises are the real threat to all…

  • Peter says:

    And the economy keeps rolling along with unemployment shrinking rapidly. Now we need to NOT immediately cut taxes and resist the urge to ADD expenses to the budget for this new revenue. Keep shrinking the deficit.

    The biggest impact I see that the political regime change has had on the markets and economy is the rolling back and reforming of the cumbersome and redundant regulations. The amount of overhead that was wasted annually tending to this nonsense is significant. You take some of that cost away from corporations and small businesses and they have more money to hire people. Plus, you maintain the basic regulations that are needed – you don’t turn it into the wild west…..just sensible regulations that work for an industry rather than nonsensical ones that make voters happy.

    • Stevendad says:

      I talk to business people and some of the economy changes are just due to perceived more probusiness attitude of the government. If EVERYONE just spends 1 or 2% more the effect is huge.

  • Stevendad says:

    Acording to what I read, 18% would be about budget neutral if you took out all the different incentives in the business tax code. Yes, the idea would be to try to close the income gap SH is so worried about directly without just continuing to increase income taxes on those who actually earn a wage. Hopefully, this would all try to work down the deficit, which I consider the biggest threat to our nation, people and government.

    • James says:

      Never understand the resistance to the two pronged idea of 1) working down the deficit, being smarter fiscally, reforming bloated programs and 2) individuals practicing SWEAR, working hard, saving money, etc. is so offensive to some. Just seems like obvious, practical solutions that would help our nation as a whole.

  • Stevendad says:

    Another WRONG statement SH, per Harvard business school: We find that while community banks weathered the crisis with greater resilience than many mid-size counterparts, since the passage of the Dodd-Frank Act the pace at which community banks have lost market share is nearly double what it was during the crisis.

    • Peter says:

      Yes, Dodd Frank caused consolidation in the financial industry which hurt the little guy…..most of these regulations have that effect. The perfect ruse – make the public feel like you are “protecting” them, while making the big corporations and donors even stronger than before.

      • Stevendad says:

        Seems to end up that way a lot, doesn’t it?

      • Peter says:

        It really does. But is it a surprise? When politicians run on a combination of money from the super-rich and the promises to the average Joe. These types of policies (Dodd-Frank, ACA, the DOL fiduciary rule, etc.) all make both people happy – the rich donors that puppet their decision making AND give the appearance that you are helping the average Joe. Most average citizens don’t ever know how these laws are impacting them and that often the very policy they thought was going to help them suppresses them even more. This is the general storyline of the last election. A handful of counties in Michigan/Wisconsin/Pennsylvania started to wake up to the fact that the promises they had been made and the policies that had been put in place hadn’t helped them at all – so they voted for the “new guy” (Sanders AND Trump). People are souring on bull*** politicians across the nation as they start to see the truth about who they actually serve.

        • Stevendad says:

          So our politicians are motivated by money (fundraising during (as well as occasional boondoggles) during office, becoming lobbyists after) and bureaucrats can only get promoted by spending more money on staff and stuff. We MUST change both. Unwind Citizens United by Const Amendment if necessary, spend limited public funds on campaigns and stop or reduce private funding, restrict total spending on campaigns, permanently ban Congress from lobbying positions, etc. As far as bureacrocy, need to do zero based budgeting, incentivize delivery of services at lowest cost (like the real world), increase accountability, etc. Other ideas anyone ?

  • Stevendad says:

    Peter: Re: wealth tax. I’d exclude real estate because it is already taxed on the state and local level. This is to get a tax on the very few who have many millions and billions in financial instruments and pay nothing on their wealth

    • Stevendad says:

      And the EBITDA only for the nonpublic companies. Just use stock or bond value for public companies

      • Peter says:

        Hmm….so you are saying apply real estate taxes (usually 1% or so) to all financial assets. Would anything be exempt? 401k’s? Businesses? Could make valuations difficult if you include businesses, farms, etc.

        • Stevendad says:

          Right, 1-2%, in concept to catch up the very wealthy that “shelter” in stocks and business equity. All fair game, but maybe $10 million exclusion. There would be some issues, but EBITDA helps simplify by not requiring a bit by bit accounting of each piece of property.

  • Stevendad says:

    Socialism at work: from CNN:
    Under Chavez, the prices of key items were slashed so that everyone could afford them. The official price for a bag of cornflour, used in the national dish arepas, is 639 bolivares. That’s affordable for many people — but the price of flour is below the cost of production. Domestic producers have stopped making cornflour.
    rampant inflation has meant more people are skipping meals, and the percentage of malnourished Venezuelans is growing rapidly.
    UNINTENDED CONSEQUENCES

  • Stevendad says:

    Re: wealth tax. Peter: A business can’t afford 1 to 2 % of valuation based on some multiple of Ebitda? I realize every industry is differeand should have different multiples.

    • Peter says:

      Are you talking about wealth tax or estate tax? And why would every industry have different multiples?

      • Stevendad says:

        I’m talking about valuation for the basis of taxing. Industries are all different based on their EBITDA. Trucking is very different from software for example. This takes out a lot of the manipulation that can be done in profits for example

        • Peter says:

          So nice to have a non-politically motivated conversation by the way… 🙂

          I do think the intent of a wealth tax makes some sense – even though I’m against it conceptually (taking more of what people have earned – and penalizing saving). But besides that, I think it is quite complex and impractical. For instance, would Jerry Jones have to pay $40m-$80m a year to the government since the Cowboys are likely worth about $4 billion? This, in addition to the income taxes he pays? And the capital gains he pays when he sells the team? Or the 50% estate tax his children pay if he dies? All of this to give our government more money to mismanage?

          • Stevendad says:

            Yes on 1% of valuation. Again, this is in lieu of estate taxes. No change in LT capital gain treatment.

        • Peter says:

          It’s an interesting example, since their annual revenue is about $700m. Corporate taxes are 35%, or $245m. The wealth tax would take another $40-$80m away. His net annual taxation would approach 50%.

          I know football teams are kind of an odd example, but one we actually know the numbers for. I worry more about small businesses and farmers when we start talking about wealth taxes.

          • Stevendad says:

            In my world, corporate taxes drop to at most upper teens, with big drop in exclusions, writeoffs, etc.

          • Peter says:

            OK – but if you do all of that, it is then net neutral to government revenue? Or is it lower? Would be interesting to explore. I do see what you are suggesting here – trying to reposition the tax laws to target “hoarders” more than “earners”. Is that correct?

  • Stevendad says:

    This got lost I think: July 25, 2017 at 1:44 pm
    Interesting data from WaPo: Clinton’s campaign received 16 percent of its money in donations of $200 or less. Trump’s campaign received 26 percent of its funds from small donations. Clinton outraised and outspent about 50% and raised $1.18B from large donors to Trump’s $790M, 50% more large donations by the “People’s Party”. Also: Nearly 74% of the money he (Trump) raised in the election’s homestretch and immediate aftermath came from small donors, according to the report his campaign filed late Thursday with the Federal Election Commission. It covered activity from Oct. 20 through Nov. 28.
    So who is really a voice of the people? Who is being influenced by the rich and powerful? The rhetoric is with the Dems and the facts with Trump and to some extent Sanders. So how exactly is the Democratic Party for the middle class? And the working man is at least to some extent harmed by illegal immigrants. So ignore and harm a huge part of your base and suck up to the monied few = Trump.

  • James says:

    A great quote that applies here to all you guys continuing to debate Steven H….. “Fools have no interest in understanding, they only want to air their own opinions” (from the Bible). Saw another funny one. “Arguing with idiots is like playing chess with a pigeon…No matter how good you are, the bird is going to s*** on the board and strut around like it won anyway. Hahaha

    • Steven H says:

      Lovely of you to air your own opinions, James. No info, as usual. Just pooping on the conversation again, I see.

  • Stevendad says:

    SH: I picked (at random) a low Gini country in Sweden (.274) to compare with US(.39). Your thesis is this is due to high tax rates. (Sweden 42% and US 26%) In part, I’m sure that is true. But they also SWEAR better: substantially in savings, higher age at childbirth and much, much less opiates. The rest are close to break even. I won’t go through each country but that would be a nice master’s thesis. I suspect nearly all lower Gini countries do better at SWEAR.
    Within the US data is available by race and Asians SWEAR best followed by whites, then Latinos, then Blacks. Income and wealth correlate 100%.
    Some is undoubtedly due to a history of systemic racial bias and discrimination, but I’m not sure how to go back in time and change things. And of course Asians aren’t white and they do the best. But I do know how to go forward…. SWEAR.
    My dad was dirt poor (kicked out of home at 14 with nothing, poor enough for you SH?) He worked 3 years and then joined the military and became the first in his family to get high school and college degrees. He was a decent saver, didnt borrow for depreciating assets, worked 60 plus hours per week, educated himself as above, drank a bit but rarely was drunk, didn’t do drugs and had his first child at 21 (a bit young, but that was the times). But he taught us SWEAR over and over. All his kids had degrees with 1 doctorate and 1 masters. 3 are top 5% earners, 1 top 25% and one didn’t listen. That’s another story, but suffice it to say it’s hard for a single person to build wealth if they don’t work at all. The government’s codependent relationship allowed and encouraged that by the way. This was generational SWEAR. And his grandkids all but one (last is close) have college degrees if they are old enough. One is easily top 10 in the world in his endeavor.
    SWEAR is one method of teaching to swim vs temporary life preservers. SH wants you to passively sit back and wait for rescue. Perhaps just try one stroke, then another, then another. If you have a child at 16, then start that day. There are MANY programs to help you. But use them as a means not an end. Before long a vast majority will be swimming.
    There are 5.666 million job openings, over 2 million require no skills (BLS May). Clean toilets and bus tables, move up to washing dishes, move up to cook, educate yourself along the way, save a little and don’t overspend, don’t do drugs or much alcohol, have first child at 27. Worked for me. Of course I am somehow wicked in the eyes of SH and Bernie Sanders (he never cleaned toilets) and the Dems crushing the poor for my own evil enjoyment. You are a fool if you believe this BS, and I suspect you do SH. You don’t have to rely our dysfunctional Congress to do it. You just have to make better personal choices and work harder. No moralizing, just TRUTH. But “you can’t handle the truth!” (Thanks Jack) Please refute that the vast majority who SWEAR don’t end up with more wealth and income than those who don’t. You can’t! Again, TRUTH versus political lies, doctrine and BS.

    • Peter says:

      Well said….and people will continually disappointed if they wait for anyone (particularly politicians who are catering to the 0.01% who fund their campaigns) to help them. It’s all BS – a total charade to hoodwink the people that are most desperate. Why would a poor working-class Midwesterner think that a politician who raised $1 billion for their campaign would be beholden to help them? This is PRECISELY what happened in the last election. A number of counties that had voted Democrat the last two elections and seen no results decided it was time to go for someone who wasn’t “establishment” or part of the big business political machine. (I truly believe they would have voted Sanders if it was Sanders vs a Bush too) These poor, working class people that we have constantly been discussing who are looking for government to save them have finally started to become disheartened with that prospect. And this isn’t Dem or Rep at all….it’s Washington.

      The sooner an individual realizes that by practicing SWEAR they can advance out of just about any situation, the better. The sooner an individual realizes they are independent, wonderful people with something to offer the world, the sooner their lives will change for the better. Self-help books, lottery tickets, Oprah and Dr Phil, affirmative action, and most importantly relying on our inept, divided government won’t do it. Good parenting, inspiration, confidence and hard work will. And there are tens of millions (if not more) of people in our society that prove this to be the case. The government are the fools in this argument and anyone who thinks they can/will/are motivated to solve the plight of every American are fools themselves. Structurally, this is an impossibility with billion dollar campaigns funded by Wall Street, the .001% elite and powerful shadowy political figures like Soros and the Kochs.

  • Stevendad says:

    Re: Podesta. Yes, the source colors the information. Perhaps I should use Breitbart all the time. It would be much easier than going to source data.
    “unproved accusations against Hillary are not even in the same ballpark.” This is you opinion only. No proof. Again, if Hillary had won there might be similar attacks on her. The MSM really didn’t like her either. And we know the Repubs don’t. So I’m not arguing your dead fish smells more than mine. I’m arguing all dead fish smell.

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