Rents in New York, Los Angeles and Washington D.C. average $2,090 and are among the highest in the nation, running as much as 218% higher than in other major metro areas, according to Movoto.com, which tracks sales and rental prices in the 40 largest U.S. cities.

“This fact is common knowledge throughout our dear land and amongst the Federal government,” says Leonard Steinberg, publisher of LUXURYLETTER and a managing director of Prudential Douglas Elliman. “The Federal government still taxes people living in these cities as if they were living in Tupelo, Ms:  Yes, $ 250,000.00 income a year makes you quite wealthy in Tupelo, but not in New York!”

Now compare these rents to incomes; in most metro areas, income dropped between 2008 and 2009, according to the Commerce Department. In the New York metro area, for example, income fell 4.6% to $52,375, which translates into no more than $1,527 per month rent or about 35% of your income. You’d be hard-pressed to find that kind of deal on a studio in Manhattan or a two-bedroom in Brooklyn.

Jimmy McMillan, the nutty governor candidate for New York State may have a point. Except of course, like all politicians, what the politician says does not necessarily apply to the politician: Mr. McMillan pays $ 800/month in rent, almost a third of the average rental in New York……

In an unexpected twist, many cities are seeing rent prices rising because of the housing downturn. This includes areas that didn’t experience a construction boom, but where a large number of people have lost their homes to foreclosure and now have no option but to rent. In Austin, Texas, a new two-bedroom two-bath condo runs around $1,800, but cost $1,200 before the downturn, says Jack McCabe, CEO of McCabe Research & Consulting, which tracks the housing industry.  In Austin, income fell 4.9% to $35,522, making that 35% of income threshold a meager $1,036 rent payment.

So why then does the Federal Government not make a provision in their tax code for the cost of living for certain cities where the middle class are really not rich or middle class anymore? Is Middle Class the new POOR in New York?