In the great debate about taxes both sides of the aisle are always pandering to the middle class. However the more you dive into who they are talking about the more I have come to realize that there is little to no consensus on what is middle class, what is poor, and what is rich. I've heard as little as $60K per year for individual being considered rich. Especially in the realm of taxes there is a lot fo discussion about who is rich, and where the top tax bracket kicks in to effect. The question is what do you consider middle class? Assume a family of 4 (2 kids 2 adults) Middle Class - $70,000 -$200,000 per year, in order to get out of middle class in addition to making more than $200,000 I think you'd have to have a substantial net worth (mainly savings and little to no debt).
Here's EVERYBODY's rule: I'm middle class. People who make a lot more are rich and people who make a lot less are poor. It's a politician's dream definition.
It depends entirely on region, state, and city, imho. What is middle class in austin, texas is not the same as what is middle class in rural Utah. In Austin, a 2-teacher household would bring in approximately $90k. To me, that's enough to support a family of 4, but barely. Honestly, I think the fed government needs to examine the debt problem in this country and start attacking the real source of a lot of people's money troubles. But that's a different thread.
the problem with saying it depends on location is that the tax code could care less where you live. There is no tax deduction for living in NYC versus Austin versus rural Utah. Tahoe, I agree that politicians love that definition of middle class, however the rich that they would like to tax would consider themselves middle class.
See- when I think of Rich I don't think of income, I think of net worth. Same for middle class and same for poor. Maybe that's backwords but just my thought. For example, say a farmer is sitting on 1,000 acres of paid for land worth 5k an acre. You are talking about a guy that's worth 5 million, but he might only realize $75k a year in income. I'd say he's wealthy. A 2 income couple, who financed theiir way through college and medical school to the tune of 6 figures, that makes $150k a year is not wealthy to my way of speaking. They make a good income and can b/c wealthy, but they are not there yet. Most of the time high salary equals high worth- but not always. I think you have to be worth 7 figures on a balance sheet to be wealthy- otherwise you are still working for a living everyday like all the other schmucks out there. JMO and maybe a quacks post and not a west mall post. I'd love it if politicians were not allowed to use adjectives for tax plans. It would be a lot better if Obama had to say I'm going to raise taxes on everyone who makes more than 78K while lowering taxes on everyone who makes less then 31,500.00 (just picking numbers). That would be a lot more enlightening then hearing- we are going to raise taxes on those that can most afford it while giving the middle class a tax break, to soaring applause lines. But that's a better world that I'm betting I'll never see.
I've known independent businessmen including farmers who have a net worth of more than ten million dollars who don't think of themselves as rich. Every dime is in the business and they live the same as schoolteachers. Or close. I've dozens of professionals who make three hundred smackers or so who also don't think of themselves as rich because their net worth is only a million or two. Awhile back (adjust up some) Forbes said affluent is $75K per year and a few hundred thou in net worth. Richis $250K in income and two million in net worth. Super-rich is a $10 million net worth. I'll go with Forbes definition. The average income is a little over $40K. It's kind of hard to have the lower bound above that. I'll say a family of four earning less than $15K is poor.
We should look at statistics when we talk about helping the "middle" class. The median household income in the U.S. is about $50k. $150k puts you in the 95th percentile. Looking at it statistically, middle class households are those with annual incomes between about 40k-100k. Folks below 40k are struggling for sure, and those earning 100-150k are upper middle.
Tahoe- $250k a year in income & 2 million net worth or $250k a year in income or 2 million in net worth. If it's the first I agree- that's rich. If it's the second I think the 2milion net worth is richer than the $250k a year in income. IOW you could cash out, pay your debts, invest in CD's basically at 5% and clear 100k a year that's essentially all discretionary income (you'd have no debts). That's rich to my way of thinking.
