Taxing the rich is a popular proposal if you look at the polls. But it often comes—thanks largely to comfortably well-off politicians and pundits—with debate over what exactly “rich” means. Is it measured in income? In wealth? Should it be adjusted in places where the cost of living is high? Exactly how sorry should we feel for people who make a mere $400,000 a year? On a policy level the basic debates over what income levels should be taxed more highly have to happen, but the way they play out is frequently noxious, and far distant from the lived reality of most people in the United States.
What do you think makes a person rich? (In money. Answers like “In love and family and fulfillment” are very moral and all that, but we’re talking money here.) Is that number different when you think about other people than when you think about what would make you feel rich yourself? What level of income, and what level of wealth? What role does location play? When I ask those questions, what is your gut-level answer?
Once you’ve thought about that answer, consider these numbers. According to the Census Bureau:
In 2020, the median household income was $67,251, down from $69,560 in 2019. (Median is the midpoint—half of people are above it and half are below it.)
In 2020, the median earnings of men who worked full-time year-round were $61,417. For women, the equivalent number was $50,982. The median earnings of all workers 15 and older with earnings was $41,535.
According to the Congressional Budget Office (CBO), ”Among households in the highest quintile, average income before transfers and taxes was $321,700 [in 2018], compared with $77,500 among households in the middle quintile and $22,500 among those in the lowest quintile.”
But, the CBO notes, that doesn’t tell the full story: “Moreover, income before transfers and taxes was skewed toward the very top of the distribution within the highest quintile. Average income before transfers and taxes among households in the 81st to 90th percentiles (the lower half of the highest quintile) was $172,400 in 2018, whereas income among households in the top 1 percent of the distribution (1.2 million households) averaged $2 million.” And the difference between those in the 99.9th to 99.99th percentile and those in the top 0.01% was even bigger.
Find out whether your income puts you in the upper, middle, or lower tier in your area.
How does your gut-level answer about what makes someone rich compare with the numbers?
What do you think makes a person rich? (In money. Answers like “In love and family and fulfillment” are very moral and all that, but we’re talking money here.) Is that number different when you think about other people than when you think about what would make you feel rich yourself? What level of income, and what level of wealth? What role does location play? When I ask those questions, what is your gut-level answer?
Once you’ve thought about that answer, consider these numbers. According to the Census Bureau:
In 2020, the median household income was $67,251, down from $69,560 in 2019. (Median is the midpoint—half of people are above it and half are below it.)
In 2020, the median earnings of men who worked full-time year-round were $61,417. For women, the equivalent number was $50,982. The median earnings of all workers 15 and older with earnings was $41,535.
According to the Congressional Budget Office (CBO), ”Among households in the highest quintile, average income before transfers and taxes was $321,700 [in 2018], compared with $77,500 among households in the middle quintile and $22,500 among those in the lowest quintile.”
But, the CBO notes, that doesn’t tell the full story: “Moreover, income before transfers and taxes was skewed toward the very top of the distribution within the highest quintile. Average income before transfers and taxes among households in the 81st to 90th percentiles (the lower half of the highest quintile) was $172,400 in 2018, whereas income among households in the top 1 percent of the distribution (1.2 million households) averaged $2 million.” And the difference between those in the 99.9th to 99.99th percentile and those in the top 0.01% was even bigger.
Find out whether your income puts you in the upper, middle, or lower tier in your area.
How does your gut-level answer about what makes someone rich compare with the numbers?