According to Table A-2 of the Census Bureau’s 2010 Income, Poverty, and Health Insurance report (hot off the presses just yesterday, folks, get your PDF copy now! Only $0.00 with free shipping!) 3.9% of American households earn over $200K/year. That’s still not very many, though, but it’s enough so that if you’re at the lower end of that range, you can feel like you’ve got plenty of company, and conclude that you’re not really that rich compared to other Americans, because you barely see the 31.6% of Americans making between $35K and $75K per year, and the 36.6% scraping by on $35K/year or less are all but invisible to you.
I agree that we don’t make public policy this way, but we don’t really need to define rich by legal terms to set policy. We simply set tax rates, if you make x you pay y and if you make c you pay d.
I am a firm believer that people making higher incomes should pay more in taxes because it is pretty clear that they are getting better government services and thus should pay more. Using DC as an example, the richer neighborhoods have better schools, get their streets plowed first in a snowstorm and if one of them gets murdered, it is on the front page of the Washington Post and you can bet that the mayor and chief of police will vow to get to the bottom of this crime.
Taxing the rich is a punitive punishment from the poors and their politicians for what the poor feel is “theft” of their piece of the pie.
I’m going to ignore the debate on whether $200,000 a year is “rich” or not.
The argument against taxing corporations higher is that they just pass those taxes onto their customers and employees in the form of higher prices and lower wages. There is also an argument that higher taxes discourages businesses. Not just large faceless global conglomerates (which are evil), but small businesses as well. And without businesses, you don’t have jobs.
And they pay for that in the form of higher local taxes.
Which they presumably understood when they moved there. You don’t go to Neiman’s and complain that it’s more expensive than Target.
Well, you might not!
I am not trying to be mean, but I simply, honestly and completely do not believe you.
You believe in trickle down? Let me guess … also Santa, the tooth fairy and Bigfoot, right?
To my mind there is a reasonably objective definition of “rich” which is based, not on how wealthy one feels or on measuring one’s place relative to others on a percentile basis - both of which require subjective cut-offs (why the top 3% as opposed to the top 5% or top 1%?) – but on a class-based, functional definition.
To my mind, “rich” is the appropriate description for those in the upper class of society - the main distinguishing feature of which being the ability to obtain income, not from wage-slavery however well paid, but through techniques such as asset allocation, investments and money management. Some exceptions apply for extremely successful actors, sports stars, lawyers and the like.
For the most part, those earning in the $200,000 to $300,000 range are professionals such as lawyers and doctors and managers – in short, those at the upper end of the middle-class spectrum. They are not really “rich” in an absolute sense, though of course they are “richer” than the vast majority of North Americans, to say nothing of the rest of the world. They do not have the sort of power and influence that the truly rich do, nor do they typically have anything like the assets that the truly rich have. Their concerns are typically middle-class - housing, education for their kids, retirement savings. The difference is the ease of meeting these burdens.
[Disclosure: I’m a lawyer myself, and I earn over $200,000]
With ya there too . . .
. . . which leads me to pause here for a moment and ask Starving Artist and others who dispute the moniker “rich” for $200k and up households, what exactly are you disputing?
If:
[ul]
[li]There is an income threshold above which 96% percent of the population (new, revised numbers thanks to RTFirefly)[/li][li]2/3 of the population earns $75k or less, fairly evenly distributed in the upper and lower halves of that value, (so, I assume there’s about 26% of the population earning between $75k and $200k)[/li][/ul]
. . . then doesn’t it make sense to recognize that, at some point around this $200k mark, where the percent of the population earning that income becomes increasingly small (and I think 4% qualifies as small), these people have financial opportunities unavailable to those in, say, the lower 1/3rd, or 2/3s of the population? From a demographic, sociological standpoint, isn’t it clear that the $200k plus people ought to be categorized differently than the $50k folks? Heck, Starving Artist, this shouldn’t even be a question for you, as you think that the $200k folks are all smarter, more capable, and harder working than the $50k folks. So of course they should be considered a different group.
And so, frankly, who cares what we call it. I’ll call them glargalflargels, but the meaning is that they’re in a dramatically different socio-economic class than half of the population. Does anyone deny this? Is it just the term ‘rich’ that has stupid emotional baggage for folks? If I called them the income-elite, would there be an argument about that?
I subscribe to the trickle down theory of intelligence, which probably explains the large partisan gap between grad students and high school dropouts. Just give it a little more time and these Reaganites are sure to get a little smarter soon!
I get your post, and I hate to sound like a broken record, but I think you under-estimate the ability of what you’re calling the upper-middle class to earn money on ‘asset allocation,’ and over-estimate the true cost of necessities.
Someone in your (generic ‘you’) town (in fact, most people in your town) are meeting those middle-class burdens on $50k a year. If you earn $200k, you could also meet those needs on the $50k, and have $150k for investments. It doesn’t take that many years before you’re compounding interest like a motherfuck (to coin a phrase).
There is most definitely a difference between the $200-300k/yr earners and the, say, closer to $1M and up (which I think would satisfy your definition of rich), but lumping the $200s in with the $50s is as silly as lumping the $200s in with the $1Ms. Calling them ‘upper middle class’ implies a commonality that just isn’t there. Perhaps calling them ‘rich’ implies a commonality in the other direction that just isn’t there as well. I then refer to my previous post and recommend that henceforth you belong to the glargleflargels. 
I dispute it because we already have a perfectly adequate set of definitions for our class-structure. In what way do we benefit by inventing a new one?
And if we are going to embark on such an exercise, why choose 3% over 5%, 10% or 1%? Does anyone seriously dispute that the top 10% of earners are better-off than the other 90%? The cut-off point chosen is wholly arbitrary and thus not useful.
To my mind, there is a qualitative difference to those who are truly “rich”, as outlined in my post above.
Which of course has nothing to do with the question of progressive taxation.
Bingo.
I’m sincerely fucking tired of hearing people essentially say “I don’t have enough money to do exactly what I want when I want because I want. Clearly I’m not rich!”
But you should. And I say that I someone in a similar position, living in the DC area. As much as I understand how you feel, I think you need to apprecaite that the majority of households have basically no savings, and would struggle to come up with even $1000 in an emergency. Can someone living in DC making 200k buy a yacht, or have a Georgetown townhouse? Maybe not, but that can’t be the standard because that type of standard is an ever moving target.
A few weeks ago, I heard Howard Stern telling a story about how he went to a Leon Black’s birthday party, where Elton John played a private concert. Stern was in awe of how rich Black is, and played up how unbelievable it was that he was able to hang out there, and to see that stuff. The following comment is very illustrative.
US?! Howard Stern is rumored to be worth around $500 MM, while Leon Black’s net worth has fluctuated between 1 and 3.5 billion in recent years. There are very few things you can’t do with a net worth of 500MM that you can with 3.5 billion. The fact that Stern believes something like that should illustrate how deluded people are wrt money.
As much as you see yourself as a working stiff, you need to appreciate how much better off you are financially than most people. You may be at a point where your salary doesn’t go as far as it will because you just bought a house, and are paying off student loans, but with time, you can have nearly all the accoutrements of success. If you are still paying off student loans, you are probably relatively young, and will not only finish paying those off, but will likely have the opportunity to increase your take home pay over the years. That is an incredibly enviable position for the majority of the population.
Do you mind me asking where you live?
But doesn’t that theory break down at some point? I mean, do you really think someone driving 130mph doesn’t think they are going fast because they were passed by a guy doing 155? Shouldn’t there be a point where an objective observers can agree that X mph is pretty fast?
i’m still not understanding why 3 or 3.9% of the country should be supporting the rest of the country by paying higher taxes when nearly half the country doesn’t pay taxes at all.
as far as trickle down…in my life it’s true. the more my husband and i get taxed, the less we can afford to pay our employees. We pay 100% of their healthcare, match their 401k 100%, have profit sharing plans,etc. but the more money we lose in taxes bc we gross over a certain amount…the less we can afford to give back to the people who depend on us for their salary,raises,and benefits.
i think it sucks that someone like my husband worked his way through college and med school with NO help from anyone only to be told that he now has to support programs like welfare and section 8 housing for those people who chose not to do anything with their lives but milk the system and NOT pay taxes.
You should try reading the thread, it might help.
while i appreciate your shitty attempt at being snarky, i did read the thread and still haven’t seen a single reason for overtaxing some people and not taxing others at all.
On what are you basing this? I’ve earned $50,000 in the past and now earn over $200,000. The amout I am able to earn from “asset allocation” isn’t nothing, but it isn’t all that high either - certainly not enough to live on, or I would 
You cannot own a house and a car in this city, and have children, on $50,000. Moreover, you are forgetting the tax burden (around 30%). No-one is so focussed on wealth accumulation that they are willing to live on 50K, foregoing such things as houses, cars and extra-curricular activities for the children, when they earn 200K. It doesn’t happen unless one is an extremely miserly sort.
What, at 2% per year, which is what safe investments like GICs are earning? Or in equities these days, which are earning negative money?
So far the best investment I’ve made is my house, which in Toronto has increased rapidly in value. The increase is about $200K.
I do try to save money for retirement, but you are seriously over-estimating how easy this is particularly in today’s economy.
I disagree. The difference between the truly rich and high-end wage-slaves is obvious.
I’ve got the perfect solution for you, **Agent Violet. **Have your husband quit his job, do nothing and then milk the system and NOT pay any taxes.
Think how happy you’ll be then.