So what would you call a person who earns a million dollar salary a year, and spends a million dollars a year? Is there no word to distinguish him from the man who has a huge fortune invested so that it provides him with a million dollars of income a year?
With no savings to show for it at the end of the year? I would call that person an idiot.
Yes. The first is a “high income” individual. But not rich.
I think the difference is that low income people who try to save can get hit by expensive emergencies, which puts them behind. The impact of these are much less on high income people (as my new sewer line can testify.) Splurging for low income people might be a nice restaurant rather than a car, but I’m not sure the impulse to overspend is a function of income level. I could afford a Mazda Protege, but wasting money like that would give me the creeps. I’m lazy but I’m also cheap. Comes from my father who grew up poor during the Depression.
Running your credit at full tilt seems to be the contemporary way of doing things. I don’t know what to call that.
Putting it all together, I’ll say this (ignoring for the moment the semantic arguments): a person earning $200K a year can, if he or she so chooses, live like they are rich. However, by doing that, they of necessity must live a hand-to-mouth existence that precludes achieving some of the goals of most middle-class folks - that is, saving money at a rate necessary to avoid being subject to excessive risk or to have a comfortable retirement. They can have the “stuff” that makes people believe they are wealthy, but a downturn in their prospects and it would all go away.
In short, $200K/year is enough to appear rich, but it isn’t actually enough to be rich; and the person who uses their $200K to appear rich will, in all likelihood, be neither “rich” nor achieve the goals of being “upper middle class”.
So, in summary, $200K/year is enough that, with some restraint and modesty in spending, a person can achieve the goals of upper-middle-classdom (given time).
I think it’s silly to have a semantic argument over what “rich” means. It definitely means different things to different people.
I remember someone saying they weren’t rich, and I knew what they meant, but my response was “You own four homes, 3 luxury cars and a nice boat, and you play golf every other day. To the vast majority of people in the world, that’s rich.” Admittedly, he worked hard for his money and his investments hadn’t helped much, and he was retired after working into his 80’s. His son in law, who makes twice my good salary in his annual bonus alone, agreed, saying it’s relative. The man didn’t feel rich because he wasn’t a member of the idle rich, and couldn’t possibly have lived like that off his wealth before retiring. To someone struggling to stay housed and fed, that’s not a very important distinction.
It’s a word. Different people mean different things by it, and it can take on different meanings for the same person, depending on context. It’s not what’s important. What’s important is whether and where we should draw a line (or put a knee in a curve) for tax purposes.
I’ll pass on the OP’s naive suggestion that we could avoid or reduce individual taxes by taxing corporations more, since it’s been handled above. Suffice it to say that we’d simply be hiding the taxation, and the result would effectively be more regressive rather than less since everyone consumer would pay the same effective rate, while poorer people spend a higher portion of their income.
This is the most pedantic argument I’ve seen on this board in months. The correlation between “high income” and “rich” is staggering.
The income tax increases for higher income people. Some people call that “taxing the rich more.” BFD. You aren’t making any kind of substantive point by going on at length about how some Star Bellied Sneetches have five points on their stars, and others have four.
But I can only imagine the howls of socialism if there were a Federal tax based on accumulated wealth. We tax income in this country. Get used to it.
People with high salaries who live beyond their means have the same issue, it’s just a different scale. If you have three homes, that is three furnaces to go out (at least), and unoccupied homes often have more maintenance issues. A Protege is a pretty cheap car to fix, compared to repairs at the Audi dealer. If your huge income is mostly dedicated to paying your huge mortgage, your huge credit card bills, and the huge lease payments on the His and Hers Beemers, the impact is going to still be pretty darn serious. It’s just a taller house of cards.
The distinction between “rich” and “higher income” is significant because by constantly defining “rich” downward, the government brings more middle class people into higher tax brackets and/or subjects them to higher marginal rates. It’s a deceptive, manipulative and dishonest way to broaden the tax base on the backs of what is more properly defined as the middle class.
Remember when Paul Ryan argued in the vice presidential debate that even if the government were to tax the income of every millionaire in the country at 100% it would only fund the government for four months? And remember how he said: “Middle class: they’re coming for you!”
Well, this is how they do it. Politicians know the votership doesn’t favor raising taxes on the middle class but most people are fine with sticking it to the rich, so they simply set about redefining middle class as “rich.” See? Easy/peasy, problem solved! Or at least to the degree people fall for it.
And to try to keep them from falling for it is why it’s important to make a distinction between mere higher income (and trust me, $200,000 a year is solidly middle class and a far cry from even upper-middle class, much less wealthy) and “the rich.”
I really hope republicans keep campaigning on this.
I live an a high cost of living area, make pretty good money, and still recognize that it is hard to reconcile someone being middle class and earning more money than literally 96% of Americans.
So I make (murmur murmer) thousand dollars a year and live a mostly middle class lifestyle. I’m still among the top (murmur) percent of income earners in this country. Facts is facts.
And by the way, it is Republicans who always talk about “broadening the tax base,” and the “lucky duckies” who so poor that they get away with only paying the payroll tax. The idea that Democrats are trying to soak people other than the rich is just hill-arious.
I’m not talking about people who live right to the limit of their means no matter how much they have, I’m talking about those who are more moderate. A moderate person of low income will be very stressed by a new furnace - a moderate person of high income won’t be.
And the fact is that you’re confusing middle class with middle income. They aren’t the same. To wit:
Hey, we’re just trying to be inclusive. Isn’t that what you guys are all about?
Seriously though, what Republicans believe is that everyone should pay his fair share, including many among the 47% who pay nothing toward supporting the country they also benefit from via federal income tax.
I’m sure your retort will be that it’s harder for low income people to have to pay income tax than it is for wealthier people. To that I would point out that it’s also harder for them to pay gasoline tax and tolls on toll roads and excise tax and city, county, state income tax, property tax, and Social Security and Medicare taxes, but yet somehow they manage to come up with those. So how is it they have come to be so poor they can’t pay their rightful federal income tax? Well, lemme tell ya: It comes to be that way because unlike the other taxes, Congresspeople and presidents know that by exempting people from having to pay income tax makes them guaranteed Democrat voters. So Democrat politicos are forever seeking to increase the standard of what income level qualifies as “poor” in order to exempt more low income earners and thereby lock in more Democrat votes. This of course results in a revenue shortfall that they then try to make up by increasingly lowering the standards of “rich” (and by misapplying the term to income rather than assets, as I’ve already explained), thereby broadening the base of “rich” people to soak - people who are in actuality middle class by the definition posted above - because the fact is there aren’t enough truly rich people in this country to keep it afloat.
So to address your claim below: Yeah, Democrats are most certainly trying to soak people other than the rich…just like Paul Ryan said.
If it’s harder for low-income people to pay gasoline tax, tolls, excise tax, state income tax, property tax, Social Security tax, and Medicare tax, then it seems that the least we can do is establish another tax which is harder for higher-income people. Sort of balances things out, don’t you think?
You might find this post informative. It points out, with accompanying cites, that the percentage of people paying no income tax has has increased most dramatically under Republican administrations, and that the states with the greatest proportion of such people tend to vote Republican. So even if your argument is correct, you’re blaming the wrong party.
“Abundantly supplied with resources, means or funds.” It would be hard to argue income doesn’t count as resources, means or funds.
It’s not the same. If that car’s too expensive to repair, you have the option of changing to a cheaper car, either once your lease is up or just getting a cheap run-around for a while.
If you’re not even living in a house, the furnace going out will not leave you cold. Hell, you could even downgrade to two houses if you were finding them hard to maintain, or rent one out. The impact is not the same at all.
Your hypothetical person doesn’t have to live beyond their means this way - that’s their choice. Nobody needs three houses, two lying empty.
On this issue (and this issue alone!) I gotta agree with the US conservatives: measuring one’s position in the social hierachy by percentages in this way is meaningless.
To my mind, classes are defined more by the reasonable goals and abilities of the persons in the class, assuming they behave in the manner typical of that class.
For example - say, convinced by the “facts” that you are “rich”, you started to behave like you were rich - leasing luxury cars and vacation homes, hiring personal servants, etc. How would that work out for you?
I have no idea what your means are, but I know for example I could do that - on credit, for awhile. But sooner or later I’d run out of cash, assets, and credit.
In contrast, my means are enough to live in a very typical upper-middle-class manner: have a reasonable house in a nice area of a major city, own a nice (but not fancy) car, and save for retirement. Plus, I work in a typical upper-middle-class occupation (I’m a commercial/regulatory lawyer).
These factors point to upper-middle-classdom, in spite of the fact that my individual income, in Canada, puts me withing the top 1% of Canadian earners according to the statistics.
There are reasons for this. I can only earn what I earn by working in a major city. This means my cost of living (particularly, housing) is proportionately higher. If I could live in say, rural Nova Scotia, with the same income, I’d be able to afford a much more spacious house - in Toronto my modest 80 year old 3 bedroom 2 bathroom house is valued for tax purposes at $1 million. But if I lived in rural Nova Scotia, I could not be a commercial/regulatory lawyer with a major downtown Toronto law firm, and so could not earn what I earn.
As soon as you come up with a class-based tax code that reflects that $200k in Winston-Salem is a shitload of money, and $200k in New York is merely a load of money, let me know. Oh yeah: the tax code also has to be simple and understandable.
Good luck.
Meanwhile, as someone who chooses to live in a high cost of living area, I’m not about to cut any slack for people who want to spend their money on modest houses that are expensive. “Oh, boo-hoo: I make a lot of money but I live a very modest life because I choose to live in Jackson Hole/Sun Valley/Lake Tahoe/Beverly Hills/Greenwich/Brookline. Poor me and my fabulous location, why won’t the tax man take pity on me?” Total nonsense. I bought an expensive house, I pay more for groceries, and so on, but that doesn’t change the fact that I make several times what the median American family does. No matter how much I want to be average, I’m not. The numbers don’t lie.
You appear to me misundestanding the nature of my post.
Please read it again. I’m not asking for taxation slack. I am not making an argument concerning taxation at all.
I am merely pointing out that measuring one’s position in the nation’s social class based on “the numbers don’t lie” is unrealistic in that it does not accord with easily observed reality.
Again, I am not arguing (lest you be mistaken) that people in my position are “average”. We are not. But then, we are not “rich” or “wealthy” or “upper class” (or whatever term you wish to employ) either. We are “upper middle class”.
What this means (or ought to mean) in terms of tax policy is another issue. I’m all in favour of progressive taxation and although I’m Canadian my position is closer to the “Democrat” one on this.
However, that does not change facts - and fact is, earning $200K isn’t nearly enough to actually be “rich” or “wealthy” or “upper class”. It just isn’t, and it is silly to insist on basing one’s position (even a position I happen to agree on) on a lie.
It isn’t a lie. The numbers are an antidote to the pervasive psychological need to believe that one is normal, or average. I understand that you’re arguing a very narrow point, but to except that precise argument (that someone who earns more than 96% of their countrymen is economically – not socially – “nothing too special” [my words]) from the context of this debate is what is misleading. SA is specifically trying to argue that the word “rich” cannot be defined in any meaningful way, therefore nobody should pay higher taxes, and that $200,000 a year in income is, and I quote, “solidly middle class and a far cry from even upper-middle class.”
Even in a high cost of living area like DC, the median household income is $61,000. Someone earning three point something times that income cannot be middle class, and I care not whether you want to call them upper middle class, upper upper upper middle class, or rich. That’s totally subjective. The point is that someone making $200k is living much, much better than someone solidly in the middle class, and the income numbers belie the self-assessments of “I don’t feel like I’m well-off.”
Ultimately, the whole idea behind people with statistically rare incomes not being rich is as deceptive as saying that only football players who get into the hall of fame are the “real pros,” and those who make it into the NFL are just “talented players,” or something like that. The existence of greater levels of achievement which are very rare does not confer commonality on somewhat less rare achievements.
To say it a different way, the fact that people may live in expensive areas and get along just fine is proof of their relatively great income, not a rejection of their wealth, as SA would have us believe.