36
   

What income is "middle class"?

 
 
Reply Tue 28 Oct, 2008 09:09 pm
I asked this in another discussion but nobody answered so I thought I would ask again in it's own question.

There seems to be this big panic about Obama taxing the "middle class" or those earning around $250,000 per year.

Or, if you listen to the real panicky people, people earning around $150,000.

I know just a few people who earn that and I certainly don't consider them "middle class". I think they're rich. Please note: that doesn't mean that I think they should be responsible for supporting everyone else blahblahblah, socialism blahblahblah, Marxism blahblahblah.

Taxes, politics and pettiness aside, what the heck is "middle class" in America?

Just to split the difference, how many people do you know who make $200,000 per year?

Do you consider them "middle class"?
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Type: Question • Score: 36 • Views: 13,021 • Replies: 121
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maporsche
 
  2  
Reply Tue 28 Oct, 2008 09:19 pm
@boomerang,
My spouse and I earn $125,000 combined income and we are FAR from rich. I don't think even earning twice what I make would make me feel rich.
InfraBlue
 
  1  
Reply Tue 28 Oct, 2008 09:24 pm
There are some millionaires who don't feel they're rich.
0 Replies
 
Green Witch
 
  1  
Reply Tue 28 Oct, 2008 09:29 pm
My husband and I live nicely on something between $33-40,000 total (when you own a business it changes year to year). We think of ourselves as middle class or maybe a little lower middle class. The only reason we would want more money is so we could afford health insurance for ourselves and our employees. Otherwise, we have have everything we need and no debt. It probably helps that we don't have children. I don't think we could be considered middle class if we had kids to support and plan to send to college.

Most of my clients earn 6 figures, they all complain they never have enough money.
0 Replies
 
old europe
 
  1  
Reply Tue 28 Oct, 2008 09:33 pm
@boomerang,
According to the US Census Bureau (via wikipedia), the median household income in the United States was $46,326 in 2006. The median male income for persons older than 25 years with earnings was $39,403, the median female income was $26,507 .

If you would rather take the GDP and calculate a statistical per capita GDP number, you'd get a figure of $46,000 per capita (PPP).
0 Replies
 
eoe
 
  1  
Reply Tue 28 Oct, 2008 10:00 pm
@boomerang,
I know many people living well, homes, cars, paying for their kids education at elite schools, on alot less. They earn well over $100k but damn sure not $200k.
I guess $250k could be considered UPPER-middle class maybe? But then, what's $500k. $750k? What's rich? And remember what Chris Rock says. There's rich and then there's wealthy.
0 Replies
 
JTT
 
  1  
Reply Tue 28 Oct, 2008 10:02 pm
@maporsche,
Get rid of the Porsche and you'll feel richer. Smile
2PacksAday
 
  1  
Reply Tue 28 Oct, 2008 10:05 pm
We fall into the Lower Middle Class bracket....both of us are self employed...business owners....craft/trade persons....neither of us hold any degrees in anything, or have any college hours. We both have to "work", she has one full time and one part time employee, I have a few part-timers. We both could expand...tomorrow...but, she wants to keep things small on her end, and me, well, I'm not sure what I want to do....I have a lucrative deal on the table at the moment, but I just don't know if I want to do that yet.

In societal terms we fit the bill of lower middle nicely, but as far as monetary terms go...{they really are two different things} it depends on how you look at it. For our area we do quite nicely, very far above the average, and usually {my work varies from yr to yr} we place well above state and national averages. But if we were to live in St. Louis, or KC...or Chicago, we would do well to pay rent and live the same lifestyle as we do here. Not that we live extravagantly either, but if we need something, it is usually a matter of where we are going to buy it, as apposed to how or when, and normally if we just simply want something...what brand?

200,000 per yr, would be at the upper end of middle class...upper middle....low rich, if there was such a thing....either way, way out of our range. I do know several people that pull in that kind of salary, and I tend to look at them as "rich" at first glance. But, you really have to take into account folks like the Kennedy clan, and the Hiltons, Mr Gates, Mr. Buffet...etc. Most of us spend our entire lives working and only make a few million total, a few mill to those people is simply pocket change....those are the truly rich
0 Replies
 
OmSigDAVID
 
  1  
Reply Tue 28 Oct, 2008 10:17 pm
@JTT,
Quote:

Get rid of the Porsche and you'll feel richer

Y do u think he 'd feel richer
if he got rid of his Porsche ?
maporsche
 
  1  
Reply Tue 28 Oct, 2008 10:39 pm
@OmSigDAVID,
I don't own a Porsche. I drive a 1997 Volkswagen Jetta that I've owned for 9 years.
OmSigDAVID
 
  1  
Reply Tue 28 Oct, 2008 11:36 pm
@maporsche,
He seems to think that u shoud get rid of a Porsche.
0 Replies
 
dlowan
 
  1  
Reply Wed 29 Oct, 2008 12:22 am
@boomerang,
boomerang wrote:

I asked this in another discussion but nobody answered so I thought I would ask again in it's own question.

There seems to be this big panic about Obama taxing the "middle class" or those earning around $250,000 per year.

Or, if you listen to the real panicky people, people earning around $150,000.

I know just a few people who earn that and I certainly don't consider them "middle class". I think they're rich. Please note: that doesn't mean that I think they should be responsible for supporting everyone else blahblahblah, socialism blahblahblah, Marxism blahblahblah.

Taxes, politics and pettiness aside, what the heck is "middle class" in America?

Just to split the difference, how many people do you know who make $200,000 per year?

Do you consider them "middle class"?


Whoa!!!

If that's middle class, I'm a pauper.
Miller
 
  2  
Reply Wed 29 Oct, 2008 05:09 am
@dlowan,
It's one thing to say $250,000/family vs $250,000/person.

A family of 4 or more, with a net income of $250,000 living in NYCity, Chicago, Boston or LA could be classified as "just making it" economically. I'd call them lower middle class relative to income.

If that same family is living on a well maintained farm in Wisconsin, Illinois or Iowa, I'd call that family middle class, boardering on upper middle class.

I personally think that "CLASS" should be expressed in terms of NET WORTH, and not income. If you're worth $5 million but have a net income of only $35,000 should you be called lower class? NO WAY!
boomerang
 
  1  
Reply Wed 29 Oct, 2008 07:30 am
Thank you all for your interesting replies.

I think the danger of using the words "middle class" is that most people think it means "me". I was reading Mr. B from another thread about Biden and the $150,000 comment and Mr. B said "Oh good. We're middle class. Maybe we'll get a tax break." Maybe it's because I've been really poor before that I think of us as rich now. I guess it is all just a matter of perspective.

I think 2Packs distinction between what to buy and where to buy it instead of how are we going to pay for it just might be the best definition I've heard for "middle class".

Do you suppose the restaurant worker who makes $20,000 a year thinks that the person they serve who makes $20,000 a month is middle class, or rich?
cjhsa
 
  1  
Reply Wed 29 Oct, 2008 07:36 am
@boomerang,
Why are we discussing this? Because of tax brackets. ****, get rid of tax brackets - make everyone pay the same rate. It would eliminate the IRS and a lot of CPA jobs that suck profit out of business. Fair is fair.
boomerang
 
  1  
Reply Wed 29 Oct, 2008 07:46 am
@cjhsa,
For many years my dad ranted in favor of a consumption tax. As he saw it, people who made money by illegal means, or hid their money and therefore didn't pay taxes would have to pay a big tax on everything they bought. No IRS. No sales tax. No sin tax. No nothing tax except for a big whalloping tax built into the price of everything.

Don't want to pay taxes? Don't buy stuff.

I have no idea if such an idea would work but there is a certain beautiful simplicity to the idea.
Merry Andrew
 
  2  
Reply Wed 29 Oct, 2008 08:10 am
The problem with discussing this topic is that being a member of a particular "class" isn't exclusively about a person's net worth, let alone income. A person can be poor as a churchmouse, wear clothes bought at Goodwill, use public transport exclusively and still be considered a middle class pillar of the community. How much you have and how much you make has something to do with the classification but it's nt an exclusive yardstick.

Americans are very class conscious but in a very different way from, say, the Brits. All Americans think they are middle class and strive hard to foster that image. Bill Gates thinks he's middle class; so does that person I described shopping at Goodwill. We are all fiercely middle class. It would seem very presumtuous for any American to consider himself "wealthy." That kind of attitude went out with the Gilded Age of the late 19th century and the summer "cottages" in Newport. In other words, it went out when the graduated income tax came in. Now nobody wants to admit to being anywhere above the middle class.

And, of course, there has always been a stigma attached to abject poverty. So hardly anyone who has a job or some other source of steady income will admit to being poor and, therefore, a member of the "lower" classes. They know full well that people they come into contact with will not think of them as "unfortunate." They will think of the impoverished person as lazy, goodfor-nothing, or even cursed by God. Yes, by gad and by gum, the Calvinist ethic is strong as all hell in America. There is somehow this gut feeling, this knee-jerk reaction that wealth is an indication of God's favor. Doesn't matter that the wealthy guy got that way by gouging the life savings from the people he did business with. If he's made it big, he must be blessed, God must be on his side. Really. That's how most Americans feel about it.

Where am I going with this? Oh, yes -- "class." What particular class you belong to depends only tangentially on how much money you have. If your name is Rockefeller (I mean legitimately, not because you had it legally changed from Ramirez or Reichshofsburger) it doesn't matter that you live on food stamps in public housing. You're a member of the upper classes. Your name is probably in the Social Register. If you're an illegal immigrant making about $500,000/yr. running drugs across the border, everyone will consider you lower class scum. Money has nothing to do with it in this case. The extremely wealthy drug-runner will not get invited to any inaugural balls. The Rockefeller living on public assistance may well get an invitation.

And when it comes to income or net worth as an indicator of class status, the picture is complicated by geography. What's upper middle class in Podunk is abject povery in NYC. The measure of wealth is not numerical, it's not how much actual money you have. It's what that money will buy in the place where you're at.
CalamityJane
 
  1  
Reply Wed 29 Oct, 2008 08:50 am
@Merry Andrew,
Very well said, Andrew.

Us southern Californians are mostly rich in assets (real estate) and dirt poor
in tangible assets (cash) - that's why we chaaaaaarge everything! Wink
Thomas
 
  2  
Reply Wed 29 Oct, 2008 08:59 am
@boomerang,
There is no rigorous definition of the term "middle class" -- which, I suspect, is what makes it so attractive for politicians. The just have to say "middle class", and the vast majority of voters will think "hey, he's talking about me!" After the election, the politician can define "middle class" whichever way they want. (Obama is an honorable exception in defining it beforehand.)

For what it's worth, here is how I use the word middle class: I call people middle class when their houshold income lies between the 20th and the 80th percentile of their nation's income distribution. In America, that corresponds to a household income between $20,000 and $90,000. (Obama's upper limit strikes me as high.)

Wikipedia, summarizing US census data, has an informative article about the income distribution.
boomerang
 
  1  
Reply Wed 29 Oct, 2008 09:39 am
At the risk of derailing my own thread, I'll ask:

Why the disconnect between "middle class" = "me", and "tax break for the middle class" = "tax break for "them""?

I'm not trying to be coy, I really don't get it.
 

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