In other threads, there is lots of discussion about "doughnut hole" families who make too much money to get significant financial aid, but cannot afford the list price of college, in the context of elite colleges whose list prices are around $60,000 per year and whose financial aid tails off at around $200,000 per year incomes.
So the question is, what would prevent a family earning that much income from being able to save up for kids' college costs, or pay a kid's college costs out of current income? Let's assume that there is not something like a money draining divorce, medical costs, or similar financial catastrophe affecting the family.
Let's assume that the $200,000 income family pays about $37,000 in federal income tax based on the estimate from http://www.bankrate.com/calculators/tax-planning/1040-form-tax-calculator.aspx or http://www.calcxml.com/calculators/federal-income-tax-calculator?skn= (married joint, 2 personal exemptions, 1 child, and all income is from wage/salary/tips). Medicare and Social Security taxes would be another $10,000, so total taxes would be about $47,000, leaving $153,000 after-federal-income-and-payroll-tax income.
Some states have state income and/or payroll tax; for example, in California, the family would pay about $15,000, leaving about $138,000 after federal and state income and payroll taxes.
So how would you live and pay or save for a kid's college costs with $138,000 to $153,000 income after federal and state income and payroll taxes?
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