Wednesday, April 8, 2009

What is rich?


In think there is a common misconception about what is considered rich. Below are some income ranges by household. The only thing you have to remember about these numbers is that roughly 51% of the total households included are married couples so they have dual income.

US Household Income Ranges:
Bottom Quarter:
$0-$25k: 28%

Second Quarter:
$25-$50k: 27%

Third Quarter:
$50-$75K: 18%
Top Quarter:
$75-$100k: 11%
$100-$150k: 10%
$150-$200k: 3%
$200-$250k: 1%
$250k+: 2%

An overwhelming majority (94%)of households make less than $150k total, and furthermore a huge majority (84%) make less than $100k. This means that if a household has 2 income earners that each make $50k on average (well actually, men make more than women on average, but that's a different posting for a different day) then they fall into the top 16% of income earners in the US.

It's funny because whenever I think about the upper class, I'm always picturing these people raking in millions and rolling around naked on a bed with hot stinky sweaty hundred dollar bills everywhere. A household who makes $150k a year is in the top 6% of US earners, but that's only roughly $75k per person. I don't really think of that as rich (well at least not stinky filthy rich), but I would argue that by the numbers it is considered rich.

36 comments:

  1. I consider anyone making $250+ very well off, but sticky sweaty rich is a half mill. and up.

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  2. I don't think the poll calculator is working right today?

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  3. sometimes you just have to click the serious icon a couple of times to get the page to refresh...it currently shows 4 votes for $500k+

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  4. Ya, I have tried to vote in a different category and it keeps showing my vote for 500k. Not a big deal....it may be rigged.

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  5. Once you vote you can't change it...perhaps some rich person hired a hacker to rig it. How much would that rich person who hired a hacker have to make a year to be considered rich?

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  6. No, you can change your vote....there is a link to click it you want to. It seems that I just can't vote for 250k, but I changed my vote for 1 mil because I think that rich person has way to much money if they hired a hacker for blogs, but its their money.

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  7. The upper class hardly exists anymore and the upper-middle class is shrinking every year. When I talk about rich pricks who make too much money I am talking about upper-elite class.

    When adjusted for inflation the minimum wage has decreased 9.3 percent from 1990 to 2005. What was happening to CEO's pay during that era...it only increased 300 percent. Corporate profits doubled during that time yet production workers pay has only increased 4%.

    When asking how our country has gotten into the mess that it is in all you have to look at is the top one percent of this country owning over 40 percent of the wealth. The last time this number was so outrageous...1929. Who'da thunk it?

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  8. Yea, I originally had my on 250, but changed it has I feel thats not sticky sweaty rich. The power of the link below the poll...no taking that away Jake.

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  9. Those same people pay the majority of our taxes in this country. Thanks to their hard work and money, our country can afford to do what it does. Top 1% of income earners make up 40% of our nation's total tax revenue. Top 5% make up 60% and the top 10% make up 70% of our nation's total tax revenue. The bottom 50% of earners make up 3% of our nation's tax revenue. This country is being carried on the backs of the so-called bastard wealthy people.

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  10. Those numbers a scewed though Jake, not saying all wealthy CEO don't deserve that they get pay wise. I do think its sicking to see a company struggling and the CEO give a pay cut to the employee's and then take a huge bonus or no pay cut for themselves. But back to the scewed reason. If someone makes 500,000 the will carry the nation more simply because 3% of their pay is more then someone of 100,000. I know the top bracket does pay more in taxes then the lower brackets though...also I do think we carry the poor way to much. But I do feel the middle class is being shrunken do to greedy CEO's. After all, you can't say there has been a lot of greedy CEO's, just look at all the ones that have been arrested in the last 10 years

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  11. They're not skewed, they're facts. The fact is that the top 10% of income earners pay for this country to keep running. My point is that the top 10% aren't just millionaires, they're also people making $100-150k, which is easy to do in a dual income household. And the so-called rich don't contribute more just because they make more, they also pay more tax because we use an unfair progressive tax system in this country, so the more you make the higher your rate is.

    The fact is that as much as people complain about rich people, the reality is that everyone wants to have money and be in their position. I think everyone would agree that money doesn't buy happiness, but it sure does make life a lot easier.

    I refuse to jump on the 'damn the rich' bandwagon because if I am honest with myself, I would like to have a lot of money some day and be in their shoes complaining about how much I pay in taxes. But if we continue to act like it's a criminal act in this country to succeed and make a lot of money, then we will continue to head towards socialism, where everyone is equal. Isn't that going against the American dream? The great thing about America is that anyone can come here and make it big. Take away that possibility, incentive, and opportunity and we become just another crappy European country.

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  12. That's really big of them to pay taxes on the millions of dollars they make. Of course they pay most of the taxes...I just told you the ridiculous amount of money they make and how it's only growing. BTW, did you know corporate executives have numerous loopholes in how they pay their taxes and there are many out there who probably pay a lower percentage of their earnings in taxes than a family out their who make 150,000 a year.

    I have no problem with people working hard and being successful and reaping the benefits of their labor, but it has to be reasonable. I mean why has executive pay gone from 30 times the average employee to 300 times in just a span of 20 years. And you think it's just a coincidence that the last time the distribution of wealth was this off was right before the great depression? I don't. If employees were getting compensated fairly for their services (don't they also have that right, or is that only for CEO's) perhaps there would not have been a housing market crisis due to all the foreclosures.

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  13. Well for that part I agree with. Although, I don't think there should be a flat tax across the board. I also have respect for several CEO's, such as Warren Buffet and Bill Gates, two of the Forbes richest people in the world. I think it what really has gotten the CEO's a bad rap are the few with greed issues, like Enron. Also what has given them bad raps are CEO's like at American Airlines. The CEO demands a pay cut to their employees, my mom now makes what she made in 1986 while the CEO him self and his whole board gave themselves a raise. Things like that make you say, what is wrong with the upper class...but those kind of things are just more in the news. You could find the same issue in the poor classes or middle classes if you look.

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  14. It annoys the crap out of me everytime some right wing conservative plays the "let's all be socialists" card. I don't want to be a socialist. I don't want our country to be socialists. The fact is our country is set up with the core belief that everyone should do what is in their best interest. Make as much money as you can, however you can. That is really what capitalism is all about. The only thing keeping the people with wealth and power from enslaving the entire country and keeping all profits for themselves is the government. The government must regulate how business is run and what is fair. Well, when the government is being run by the very people who have the wealth and power, that is a serious conflict of interest. I don't hate people who make a ton of money and I don't blame them for taking advantage of whatever situation they did to achieve what they have. What I blame is the system in place that allows it to happen on such a regular and frequent basis.

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  15. I am conflicted on this one. I think the ability for a person to work hard and achieve both financialy and personnaly (without limits) is part of what makes America great. However, I also know there are many hard working Americans that through no fault of their own, have lost their jobs and are struggling to make ends meeting. Don't have the answer but also don't think we can take away from the filthy stinkin rich to solve this.

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  16. The 400 top earners in this country in 2006 made an average of 263 million dollars a piece. On average they paid about 17 percent of that in taxes. For those of you who don't know, that's about what people who make thirty grand a year pay.

    And for those who think this country is turning into a bunch of socialists, the top tax bracket in the 50's and 60's, while this country was at war with communism and executive pay was not outrageous and over the top, was over 50%. The top tax bracket today is at 35%

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  17. I'm late to the party so I'm not going to sit here and rehash points made by other people. Basically, I agree with just about everything that Brett is saying. Our entire capitalistic system works fantastically in theory because we assume that there is an unbiased mediator between the producer and the consumer. Unfortunately we have allowed for the producer to greatly influence the mediator and tip the scales in favor of the producer. In the long run, this is destined to fail and we may just find ourselves finally in that long run period.

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  18. Are you saying that the 17% is the same for the two pay brackets that you mention? Because the difference would be that at $263,000,000 a year their 17% in taxes equals about $44,710,000. Where someone who got paid $30,000 a year paid their 17% which equals about $5,100.

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  19. My point was to contrast Jake's point that super rich people have to pay some ridiculous amount of taxes when they don't. The people who get screwed in paying taxes are high salaried employees who provide extremely valuable services. Doctors, lawyers, pro athletes, actors, upper management, and jobs like this are the people who end up paying a huge chunk of their money to the government. Ironically, but not coincidentally, these are the kinds of jobs that the general public can aspire to reach.

    The system is set up to where if you make your money by swimming in your cash and letting other people swim in it for a small fee (stocks, bonds, capital gains, etc.), then you somehow are special and shouldn't have to pay the proper percentage of taxes like the rest of us. If you think that is fair then there is nothing else I can say.

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  20. Brett- No actually I agree with what you, JB, and Moonbeam3000 are saying...I don't think that millionaires should get to take tax loopholes to end up with a final tax rate lower than an average person. This is why I believe in the flat tax, everyone pays their fair share of what they make and you eliminate all loopholes. My only previous point was that before we damn the rich let's A. remember that based on the numbers many people reading this blog fall into that category and you don't have to be mega-rich to get hit with a 30+% tax bracket with all of the millionaires. And B. let's also remember, that by choice or not, the taxes from the richest 10% in this country pay for our government and country to be as great as it is. I am by no means implying it's because of their good will and charity, I'm just saying that without them our country would be screwed. Tax revenues from the bottom 50% make up next to nothing. So I just wanted to point out that this cannot become simply a matter of class warfare because if we kill off the top 10% (Justin terms) of households our country would be up creek.

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  21. I am going to have to agree with Jake on this one. I think flat tax would be the best. I don't agree with having to pay more in taxes just because I make more money then someone that works at Walmart or McD's. But really guys, it doesn't matter in the long run....we are all doing to die in 2012 when the mother ship comes back for the Mayans. So lets all just enjoy whatever amount of money we do have.

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  22. In a way you don't pay more taxes than someone who works at Walmart. You don't pay any more taxes on the first 30,000 dollars you make than a person who only makes 30,000 dollars a year. A flat tax would not really solve anything, because you would only be taking more money away from low-income families, who would in turn be more reliant on the government to help them financially. And Jake has already pointed out that the tax brought in from low-income families is next to nothing in the big scheme of things anyways. Since this is true, the flat tax rate would have to at least equal or be higher than what you are already paying.

    And Jake, this argument we are in is really just a chicken and the egg argument. I say the distribution of wealth is way off in this country and you say we are reliant on the taxes paid by the wealthy. Well, you can't have one without the other. If there were less people making 10 - 500 million dollars a year and more people making 75 - 200 thousand, then we would not be as reliant. And if you take into consideration that the wealthiest people in the country use tax loopholes to avoid paying the honest amount, there would be more taxes paid or we could afford for citizens to pay less taxes without reducing the governments tax revenue.

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  23. Dude, I would not kill off the top 10%. I wouldn't never kill of the top 10% of anything because they are obviously doing something more or less right to put themselves into that category (unless you are talking top 10% of rapists or something). I would rather kill off the bottom 25-30% because they are the leaches of American society. Because of their poor, refusing-to-work asses the ridiculous amounts of money that the wealthy actually do pay in taxes is being spent on them (completely and utterly wasted is probably a better phrase). Get rid of them so we can spend the money more efficiently. But, since my views are "extreme and unfeasible" I have to be a proponent of government spending to attempt to level the playing field between everybody opportunity-in-life-wise. Basically I want things to be fair for everyone, rich and poor, so that there is no longer any excuse a person can take when they are living on the streets because they made poor decisions in life or they are rotting in a jail cell because they decided to embezzle $25 million.

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  24. Ok. I looked up 2008 tax brackets and how they are broke down. Please explain to me how these two examples are the same or equal like explained above...."in the way you don't pay more taxes when someone who works at walmart"

    A. if you have a taxable income of 7,836 to 31,850 your tax is 782.50 plus 15% of the amount over 7,836.
    B. if you have a taxable income of 31,850 to 77,100 your tax is 4,386.25 plus 25% over 31,850

    Maybe I am looking at this wrong, but I think there is a difference.

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  25. Let's say you make 31,850 dollars. You pay 782.50 + .15(31,850-7,836) = 4,385. So anyone in the following tax bracket pays that amount plus however much more they make multiplied by .25.

    It is actually a very common misconception that a higher tax bracket means you pay more for everything you make, but I assure you that is not the case. If it were then people who make 30,000 a year would make more money than people who make 35,000.

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  26. So what Brit is really saying by Sarah's example is that you would have to tax everyone 20%. The poor would have a higher tax and force more of them on welfare and the richer would have more money. You can't just say tax 15% across the board, because then the government will be taking in less money. So, now you only looked at the 77,100 bracket...now as Jake is saying, the top 10% pay the most into the system. So the $164,550 and $357,700 tax bracket is 33% which now you have to raise the base flat tax up even higher then 20%. So now look at it as this, someone working hard at Lowes or Walmart that is getting by ok, is now not because they are paying more money into the system. They have to go on welfare, now someone that is richer has more cash to sit on. I personally am in the 28% tax bracket as I am sure Jake is also, I would rather pay more taxes if it is going to keep more people off welfare that are working hard. If they aren't working hard, then that is another story.

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  27. Correction, Jake and I are most likely in the 25% bracket...I was looking at Single and not the Married bracket.

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  28. Don't assume you know what tax bracket I am in. And his name is Brett.

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  29. Oops, your right...sorry Brit the Brett. You are correct Jake, for all I know you could be in the 35% tax bracket...I know you aren't in the 10% bracket as Lucy working the streets as gangster dog brings in more then 8,000

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  30. I still think flat tax is the most fair. Go to the site listed below to read more about it:
    http://www.heritage.org/research/taxes/bg1866.cfm

    It basically gets rid of the IRS. It eliminates all of the paperwork, all of the deductions, credits, loopholes, etc... And it exempts households making less than $30k. Everyone pays the same percentage, whether you make 100k or 100mil. I think that is the most fair. Everyone is treated equally and does their part to help our country. People making below $30k don't have the burden. I would also continue the consumption tax (sales tax). Like the flat tax, the consumption tax does not discriminate. A poor person and a rich person pay the same price for a coke and both contribute to the economy. Obviously a rich person will be able to afford 2 cokes as well as a new ferrari so they will still end up paying more in taxes in the long run, but it is still their decision.

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  31. That website makes sense. Where you will win me over is the fact its stating to $30k under not being taxed, which would put less of a burred on the system for the poor. Closing the loopholes and streamlining the system is great too. So, in conclusion I would support that system compared to how you stated the way at the top. One of the reasons I like Texas is they rely on sales tax instead of state income tax.

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  32. absolutely kevin, tx is awesome for not having a state sales tax. we pay more in sales and property, but I prefer it over another income tax.

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  33. All this tax talk.....is the baby picture blog being posted today?

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  34. I could go for that flat tax rate system. I'm sure our government could find a way to corrupt it, but that system in theory is definitely better than our system in practice.

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  35. If you like flat tax, go back to 1996 and vote for Steve Forbes. I wish I would have been able to write more, but I'm trying my best to break into the top tax bracket.

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  36. Thanks for contributing Casey, but next time try suggesting something that is actually possible. If time travel were possible Brett wouldn't be here in 2009 commenting on this blog, he would be back in 1999 hanging out with himself reliving the best year of his life. Who am I kidding, I would be there too. I had spikey hair you know, with blonde highlights.

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