Something that comes up frequently in tax discussion is prosperous New York journalists who are socially acquainted with even richer people saying that $250,000 isn't a lot of money in a place like New York.
The best starting point for that discussion is the fact that the median household income in New York City is about $50,000, which is slightly below the national median of $55,000. People are perhaps thinking of the fact that in Manhattan, average incomes are higher than the national average. But even in Manhattan the median household income is only $65,000, and if you're earning almost quadruple the local median income you're obviously doing pretty well. The flipside of this is that in the Bronx the median household income is below $35,000, so if you want to work in New York and make sure you're way wealthier than your neighbors, you can always move there (speaking of which, I recommend Adam Davidson's piece on Bronxonomics).
The more serious concern people have is that housing costs in New York (and several other major cities) are wildly higher than the national average. This is true and represents a real blow to the living standards of New Yorkers, Bostonians, San Franciscans, and so forth. But it would be a huge mistake for tax policy to compensate for this. The issue, after all, is that housing is expensive in these places because it's scarce. Which is to say that people paying high rents for a modest-sized apartment in a fashionable part of Brooklyn are paying a premium for a luxury good, just like people who drive luxury cars or fly first-class or whatever. I think this scarcity of housing in key metropolitan areas is such a national tragedy that I wrote a book about it, but the appropriate remedy is to reform housing policy to reduce scarcity, not to offer a tax subsidy to the occupants of scarce housing.
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