How to Tell For Sure That You Are Rich
Daniel Gross at Slate checks in with a timely piece reminding us that people earn $250,000 or so a year are, in fact, rich. Gross feels the need to explain this because of the backlash over Democratic presidential nominee Barack Obama’s tax plan, which calls for scaling back tax cuts for people earning more than $250,000 annually. After Obama’s economic advisors outlined the plan in The Wall Street Journal earlier this month, Gross notes, complaints came from Obama critics and from what he described as the business pundit class. These arguments alleged that people who earn that much aren’t really rich, especially if they live in expensive cities such as New York. Then on Wednesday, more than 35 percent of respondents to a CNBC poll said that $250,000 isn’t enough to be considered truly wealthy.
Gross is having none of it. If you are making over $250,000 a year, Gross says, “I regret to inform you that you are indeed rich.” From Gross:
To a large degree, feeling rich or poor is a state of mind, as John McCain recently noted. “Some people are wealthy and rich in their lives and their children and their ability to educate them. Others are poor if they’re billionaires.”** **But income data can surely tell us something. And they tell us that $250,000 puts you in pretty fancy company. The Census Bureau earlier this week reported that the median household income was $50,223 in 2007—up slightly from the last year but still below the 1999 peak. So a household that earned $250,000 made five times the median. In fact, as this shows, only 2.245 million U.S. households, the top 1.9 percent, had income greater than $250,000 in 2007. (About 20 percent of households make more than $100,000.)
This is an interesting debate to be having in the middle of a Democratic National Convention where economic populism has served as a major theme. Everyone wants to help the middle class. But defining what, exactly, constitutes the middle class is a different question entirely. Some people earning $250,000 might actually consider themselves middle class, if they live in Washington or San Francisco rather than Cleveland or Detroit. Or if their neighbors are extremely wealthy and they are doing well, but not quite as well. I’ve always thought a great debate question would have been to ask each candidate how he or she defines the middle class. I wonder what Mitt Romney might have said?