What income is "middle class"?

I connect with low taxes.
I suggest repeal of any income taxation,
with all governments to be funded only from
importation tarriffs and sales taxation
at a non-discriminatory equal rate for everyone.

David

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@CalamityJane,

CalamityJane wrote:

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!

I rented for many years in NorCal and came away without the huge real estate boom money but managed to bank a lot. It's called living within your means.

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@boomerang,

boomerang wrote:

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

No disconnect: Obama's campaign advertizes a tax break for the middle class, and wants you to think that "middle class" includes you. McCain's campaign, on the other hand, wants you to think that Obama's plan is a tax break for "them", particularly people who don't pay income taxes. Consequently, McCain's campaign isn't calling Obama's tax plan a "tax cut for the middle class".

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An interesting question.

But why is "income" the only measure of class?

Tax structure is usually divided into quintiles. If the bottom 5th is poor and the top 5th is rich that gives us a fairly decent measure of the middle according to incomes. But there is a certain percentage of the population that doesn't file income taxes so aren't included in that measure. Off the top of my head I think the top quintile starts at about $175K and goes up.

The number of people that are at or below the poverty line I think is about 8% . If we assume the same number are rich, we get a different figure.

But income isn't always a good indicator of wealth. In the majority of cases it probably is but not in all cases. Some very wealthy people could have little income this year for tax purposes if they sell their stock losers.

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@boomerang,

Depends where you live. 150k in downtown NY would be middle to lower class - in the midwest you would be rich.

That is one problem with having the national tax rates based on income levels. You reward (tax-wise) those that live in areas that are low cost and hurt those that live in high cost areas.

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@Miller,

Ooops missed this - yes me and hubby - in a "normal" year would make about $150k together with two children. They do attend private, but it is the damn cheapest private school I've seen (3k tution), we can't afford a house in the area unless it was tiny, broken down or was 60 miles from work so we have a condo. We have two middle of the road cars (hondas - that are close or over 100k miles). We are far from living rich. I would put us smack in the center of middle class - if we lived elsewhere we would be upper middle class (of course assuming same salary).

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@boomerang,

It does sound nice.

I bet bartering would become big though!

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@Thomas,

The problem with that, Thomas, is that in different areas of the country the cost of living is significantly different - maybe something more along the lines of what you money can buy where you live fits the bill. If you live in Boston, that sort of income wouldn't buy you a home.

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IMO middle class is not measured by the relative percentile of income of any given country, but by a combination of the place you have in the social reproduction of wealth, power and culture, and the amount of goods and services you can afford with your income.

If you are a specialized industrial worker earning $50,000 a year, you may consider yourself middle class, because of the wages; but you are working class because of your position in the reproduction of wealth, power and culture.

If you're a lawyer in NYC and make $150,000 a year, you're totally middle class; but if you're a lawyer in New Mexico, and make $150,000 a year, it's more probable that you're in the top echelon and you should consider yourself "wealthy".

Merry Andrew said it first on this thread. Part of the American Dream (culture-wise) is to make almost everybody think they're "middle class", where there are obvious differences. People who earn $20,000 a year consider themselves -wrongly- middle class; people who earn $200,000 a year consider themselves middle class. Their relative power in society and their relative purchasing power say otherwise.
This over-comprehensive "middle class" definition keeps many working class families in the delusion that they have achieved what they haven't achieved, and that their interests coincide with what actually are other people's interests. And is good ideological prevention against any type of working class politics in America.

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In most countries of the world, it would be preposterous to equate "middle class" with "median income". Usually the middle class has an above average income and is certainly less numerous than the working class.

In Mexico, the case is clear. The median income is less than $10,000 a year. No one in their right minds would consider themselves "middle class" with that income. So we know: we have abouot 5% of rich people; 25% middle class; 30% working class; 30% poor underclass and 10% destitute.

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@fbaezer,

I think fbaezer is right on here. Just defining "middle class" in terms of median income or some similar calculation goes against the intuitive understanding of what "middle class" means. We know, for instance, the the United States for most of the past half-century has had a very large middle class. Similarly, I'm sure we'd all agree that many developing nations have a very small middle class, and it's generally acknowledged in the west that the modernization of a nation includes the emergence of a large and influential middle class. To arbitrarily set a relative income level to define middle class ignores how we actually use the term.

A cartoonish simplification of fbaezers Mexico example: if you've got a tiny fiefdom where one person makes a million dollars a year and pays his 99 serfs one dollar a year, the median income would be one dollar. That wouldn't make all of the serfs "middle class."

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@fbaezer,

peeking across the border from the northern side ...

since we live in a small (120,000 people) city , many of our costs - particularly housing - are lower than in big city .
i had a good job but never made over $50,000 - now retired .
mrs h and i believe that our "secret to wealth" was to buy a house in the early 1960's and NEVER to move - saved a lot of moving and re-decoration cost !
we have always bought a new car and always kept it for 9 to 10 years .

of course , having basic health-care costs taken care of through a univeral health care system (paid for through various taxes plus premiums) has sheltered us from exorbitant medical costs - and being in reasonably good health helps too !

we live in a fairly "ordinary" neighbourhood - all ticky-tacky houses built 1963/1964 on crown (government) land .

the neighbours are tradespeople , university profs , lawn maintenance annd snow removal "entrepeneurs" , retirees ... old stock canadians , early immigrants , new immigrants , all different religions and "none at all" - all living rather peacefully together .

haven't asked the neighbours if they consider themselves "middle-class" - i doubt that anyone really cares that much about class - it's just that we like to live here .

so what are we ?
upper class - don't think so ,
lower class - of course NOT !!!
i guess we are solidly stuck in "middle class" ! Shocked

hbg

1 Reply

@hamburger,

this picture could have been taken in the 60's and 70's in our neighbourhood

http://sf.curbed.com/uploads/3July08_MiddleClass.jpg

perhaps it was .

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@fbaezer,

fbaezer wrote:

In most countries of the world, it would be preposterous to equate "middle class" with "median income". Usually the middle class has an above average income and is certainly less numerous than the working class.

In Mexico, the case is clear. The median income is less than $10,000 a year. No one in their right minds would consider themselves "middle class" with that income. So we know: we have abouot 5% of rich people; 25% middle class; 30% working class; 30% poor underclass and 10% destitute.

Has that changed over the last 10 years, Fbaezer?

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@fbaezer,

fbaezer wrote:

IMO middle class is not measured by the relative percentile of income of any given country, but by a combination of the place you have in the social reproduction of wealth, power and culture, and the amount of goods and services you can afford with your income.

If you are a specialized industrial worker earning $50,000 a year, you may consider yourself middle class, because of the wages; but you are working class because of your position in the reproduction of wealth, power and culture.

If you're a lawyer in NYC and make $150,000 a year, you're totally middle class; but if you're a lawyer in New Mexico, and make $150,000 a year, it's more probable that you're in the top echelon and you should consider yourself "wealthy".

Merry Andrew said it first on this thread. Part of the American Dream (culture-wise) is to make almost everybody think they're "middle class", where there are obvious differences. People who earn $20,000 a year consider themselves -wrongly- middle class; people who earn $200,000 a year consider themselves middle class. Their relative power in society and their relative purchasing power say otherwise.
This over-comprehensive "middle class" definition keeps many working class families in the delusion that they have achieved what they haven't achieved, and that their interests coincide with what actually are other people's interests. And is good ideological prevention against any type of working class politics in America.

That's a damn good point....most people in Oz label themselves middle class if polled.

Though we have had quite a strong working class movement until the last 20 years.

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@fbaezer,

fbaezer wrote:

...Part of the American Dream (culture-wise) is to make almost everybody think they're "middle class", where there are obvious differences. People who earn $20,000 a year consider themselves -wrongly- middle class; people who earn $200,000 a year consider themselves middle class. Their relative power in society and their relative purchasing power say otherwise.
This over-comprehensive "middle class" definition keeps many working class families in the delusion that they have achieved what they haven't achieved, and that their interests coincide with what actually are other people's interests. And is good ideological prevention against any type of working class politics in America.

Brilliant analysis, fbaezer. <applause>

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@boomerang,

Just jumping into the conversation without reading through it as usual.....

I recently asked this question (well, in the last few years) because my sister considers her family middle class and I definitely don't. The problem I saw was that middle class sort of means different things depending on where you live. I think cost of living needs to figure into the math. Or maybe not.

Personally, I'd say anything over 100k or 125k for a family is out of middle class territory. i think 150k is pushing it and I think my sister's 210k is way out there.

1 Reply

@littlek,

I've read. I guess people were saying similar things - depends where you live.

So, where are the financial divides between poverty (is the US amount valid?), working class, and middle class?

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@boomerang,

Quote:

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.

Capitalism would crash. It's the old flat tax idea that's been dangling around for years. I've seen the more conservative number of a 25% tax having to added to everything we are now buying to make up the difference if the government did not collect current taxes. Some economists have claimed the tax would have to be closer to 30%. Cash rich people could probably absorb it, but the majority of Americans would drown in the sudden expensive rise of food, building materials, autos, clothing, fuel etc. Small businesses would suffer the most and probably disappear.

1 Reply

@Miller,

Quote:

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.

Starting salary for a NYC policeman or fireman is a little over $35,000. Do you suggest we should pay them more? Shoud we raise taxes to do so?

I wanted NYC to turn the 9/11 site into a community of affordable housing for police, fireman and public scholl teachers, but no one was interested in this idea.

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What income is "middle class"?

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