What Ezra makes at the prospect and any of the click fees he enjoys that is enough to allow him to fly out of the country for a week vacation might be considered "rich" in a small town in West Virginia.

Do you feel "rich", Ezra?

And is you finally agree upon "rich", does that then make that class a target of your jealousy?

WB Ezra. This was discussed over at MYs blog. Rich = ownership of assets (like a beer distributorship or 8 or 9 pieces of real estate) and is very much different than working for wages.

Conflating the term "rich" with some arbitrary point on the income scale is part of the problem Dems have in talking to people about things like taxes and public investments.

It is apples to oranges to compare someone who collects 150k in dividend income with a two-income family that pulls down 150k in gross wages.

Regards.

Um, I think Obama said $150,000 was middle class and implied that over $250,000 was rich.

Indeed, if you live in Hyde Park, Chicago, it's pretty clear that $150,000 is rich.

I'm not sure that this is true. If you're making $150k in Hyde Park, you certainly can't afford a single family home, and a townhome is probably iffy as well. If you have kids, you probably can't afford non-Catholic private school tuition, and Kenwood is an awfully risky public school to send your kids to.

So, at some point you have to ask yourself: If you don't make enough to buy a single family home in a neighborhood filled with them, and schools are a problem because you can't afford the neighborhood private school, are you really rich?

As luko says: wealth is a stock, income is a flow.

"Rich" describes wealth not income.

Maybe I'm just a dumb words person who doesn't get math, but in your chart, how come "fourth fifth" and "Top 20%" aren't the same number? Someone explain.

Top 20% is the fifth fifth. I agree that where the money comes from matters. Income derived from wealth is not at all the same thing as income derived from working for somebody else.

Rick, the top 20% is the fifth fifth (the top).

Straining to find some less ridiculous interpretation of McCain's statement, maybe he was thinking in terms of wealth, not income.

It's still an implausibly high number indicating that he's completely out of touch with ordinary Americans, but only by a factor of about 5-10, instead of a factor of 25-33.

Over the past 10 years my wife and I went from $100,000/yr household income to over $400,000/yr. We're wage slaves, not trust fund babies, so ours is a very high income but only modestly high net worth household (so far). Nonetheless, from our own historical experiences and comparing our lifestyles to those of our friends and relatives, living at the 99th centile of household income is profoundly different than living at $100,000/yr, and Obama's definition of rich ($250,000/yr +) feels much closer to the mark than McCain's ($5,000,000/yr+).

Rich = Wealth. Period.

But only in a strict definition. It's commonly understood to be 'high income'. After all what we're talking about is the relationship to 'middle class' (perhaps the middle?). To claim that either $250,000 or 5 million is the mark is missing the point. But, Playtpus put it best:
living at the 99th centile of household income is profoundly different

Props to platypus for admitting what few of the commenters on this topic have been willing to admit - we don't make anywhere near the income of the average hedge fund manager, and we don't more than a fraction of the net wealth of Bill Gates - but most of us are doing a hell of alot better than 90% of Americans!

but most of us are doing a hell of alot better than 90% of Americans!

That's pretty presumptuous, I'm in the middle 5th.

The problem is that wealth is not taxed in this country while wages are. Even "non-earned" income is treated specially. So capital gains and dividend income gets taxed at 15% which is below what marginal rate for median wage earners.

If all income was treated the same and if wealth was taxed in some manner than artificial distinctions between the two would vanish.

Lots of retirees have "wealth" in the form of their homes and retirement accounts but relatively low income. Treating these people as "wealthy" is misleading. If they increase their spending they risk running out of money before they die.

I see the issue differently, there are only two classes of people. Those who have to work to live and those who don't. If you don't you are "rich". If have to keep working you are a wage-slave and should be supporting policies to equalize economic imbalances which are currently working against your own best interests.

To be fair, I don't think I'd call $200k for an entire household "rich" in NYC. Its certainly upper middle class and affords you a very nice lifestyle, but New York is an extremely high priced city.

Its quite likely that if you had a household income of $200k and two children that you couldn't find an apartment with a bedroom for the parents and a bedroom for each kid along with a reasonable living room and kitchen anywhere in Manhattan. Now of course you could just move to a nice neighborhood in Brooklyn or Queens and be perfectly comfortable. But thats not exactly a rich person's lifestyle.

Income?

How is it derived;

From work? 150,000 per household doesn't sound "rich".

From investments? 150,000 per household may be considered wealthy.

Consider, wages tie you to a specific location, type of work and of course your boss or customers wishes.

Investment income on the other hand has no such restrictions, plus people who sit on their ass and do nothing all day [to earn their money] pay lower taxes.

I think being rich or wealthy implies a certain level of freedom, a couple who is able to obtain a 150,000 income from wages has little freedom. Heck, if they decide they really aren't right for each other the income drops by half. I'm not sure I'd call that rich and I don't think Barak was being honest in his answer either. Neither Obaman chose a profession...or spouse that tops out at 150,000/yr., so we have their words...and we have their actions...which always seem to be in conflict.

For example; I oppose the war, but I vote to fund it. I oppose FISA, but I vote for it. On the other hand, at one level, I guess you could call that consistent.

It is my duty to add to this discussion the testimony of one C. Rock, who has thus far been excluded, to the detriment of all discussion participants.

"Shaq is rich, the white man who signs his check is wealthy...Wealth is passed down from generation to generation, you can't get rid of wealth. Rich is some shit you can loose with a crazy summer and a drug habit."

Let's be clear. One only needs a definition of "rich" if you wish to pit one group against another.

So... the Democrats need a definition of "rich"

Let's be clear. One only needs a definition of "rich" if you wish to pit one group against another.

So... the Democrats need a definition of "rich"

Just looking at the comments here about whether living on $200k in Manhattan vs Brooklyn is upper-middle class or rich or near pauper clearly illustrates how effective the GOP has been in making nearly everyone think the rich guy is always someone else.
So average Americans get behind repeal of the Estate Tax, even though hardly anyone has an estate that would be subject to the tax.

CParis,

There is a moral aspect to taxation as well.

The issue is not simply "It's not *us*, so it's OK. The larger question should be "Is it really right to take someone's money because someone dies?"

Why should that be a taxable event?

I believe McCain's $5 million figure was intended as a joke.

I'm amazed at the inanity of the apologists here. "you can't define 'rich' because it means different things in different places" or "If we give it a number it'll just give Dems something to complain about"

The basic point of that track is "don't talk about this". Therefore, McCain with his multimillionaire wife (who he cheated on his first wife with) and her corporate jet, 9 (10?) houses - no he isn't "rich" because the word doesn't really mean anything.

I think it's a kind of repressed perversity; All the Ted Stevens', Cunninghams, Abramoffs, Phil Grahams, Exxons - the myriad ways people and organizations (especially - by far - on the Right) thieve and engineer the system to extract obscene amounts of wealth from the pockets of normal hard-working Americans, no matter the damage. But never talk about it because the word "rich" doesn't mean anything.

There are crooks everywhere, and people who resent wealthier people everywhere. That doesn't mean that McCain isn't "rich". Very rich.

For what it's worth our household income is a little short of $200K - near the top end of the scale. We're doing OK, with the usual worries and frustrations. But if I were making $4.9 million I would NOT be saying I was poor, and if I were making $20K I would NOT be saying I was rich. No matter how you twist the word to mean nothing.

Let's be clear. One only needs a definition of "rich" if you wish to pit one group against another.

So back in 2000, when John McCain said, “I’m not giving tax cuts for the rich,” I wonder which group he was trying to pit against which?

As to definitions, rich is like obscene: We know it when we see it.

"So back in 2000, when John McCain said, “I’m not giving tax cuts for the rich,” I wonder which group he was trying to pit against which?"

Well, I guess he excludes himself from "the rich" - so I figure probably Oprah, Bill Gates, George Soros and any other non-GOP billionaires are "the rich".

The issue is not simply "It's not *us*, so it's OK. The larger question should be "Is it really right to take someone's money because someone dies?"

Why should that be a taxable event?

Because the money transfers hands to someone who didn't earn it in the first place. Is there any other situation in which you could get 10 million dollars and not be taxed on it? No. So why do you get an exception because your parents earned it rather than some faceless corporation before giving it to you?

Also, if the estate includes assets that have appreciated (stock, real estate, 401k, etc., etc.), that wealth was never taxed in the first place. If I die and leave my 401(k) to my kids, not one penny of tax has been paid on that money, ever.

What if both political contestants are extremely rich? Why split hairs on Obama and McCain's definition of wealth when they both represent the facilitation of an unjust economic system? When either candidate mentions living wage, universal health care (that doesn't subsidize pharma companies), and cohesive educational and urban policy, wake me up.

Regarding the family of four trying to scrape by in Manhattan - It's true that $200k/yr won't support two kids in private school and a 3 bedroom apartment in a doorman building in a good neighborhood. But that isn't a middle class New York City life. Sending your kids to public school and taking the subway into Manhattan from your home in one of the outer boroughs is. Too many people get their views of New York from the media, where everyone wears fabulous clothes, lives in a penthouse apartment, eats out at the latest restaurants, vacations in Europe and has a house in the country (while barely working).

when McCain named $5m, my sense is he was talking about net worth, whereas Obama was talking about annual income. So the two candidates may not have been quite as far apart as you suggest, Ezra.

Then again, that distinction itself is telling: McCain thinks from the pov of people who sock away capital (wealth); Obama is thinking of people who have to work for a living (income).

Obamas first figure was 25 MILLION, so fix your chart and add Obamas 25 Million figure:

""You know, if you've got book sales of $25 million…”" Obama said.

Let's be accurate, if your going to use McCains joke, ise Obamas.

Anonymous--the problem with McCain's joke is that he used it to hide the fact that he actually doesn't know what "rich" is. The problem with the rest of us is that we are using these terms to divide and ridicule. When we change our conversation and talk about an economy that works for all we might want to look at standards that make sense. The economic self-sufficiency standard, what it takes to make ends meet according to location and family size for 7 categories, is a good starting point. For most of us, those resources are defined in terms of income. So where's our conversation of income inadequacy? The arguments over who has what are smokescreens to the real issues, like the fact that there is at least one working adult in 30% of the homeless families in this country. McCain, and his crowd, don't get THAT! Yes it's fun to show our wit, but when do we stand up and demand to live differently?

Of *course* "rich" depends on where you are. If you don't believe that, let's pull out a graph that doesn't limit the income distributions to the United States.

We're *all* fucking rich.

It's no different to say that 200K is middle class in NYC than it is to say that 1K is middle-class in The Congo.

"McCain's answer is just profoundly out-of-touch."

I understand you where on vacation and not prone to research to start with but shouldn't you maybe watch the forum before spouting off about it?

He was laughing while he said it, he gave the 5 million figure at the very end of his answer. Back only a couple days and already out of touch with facts and reality.

Where did you get the data for that, I'd like to plot the distribution with a smaller bin size...

Thanks for proving Chris Rock right, Viajero.

The number of wingnuts who are all 'joke! joke!' today shows how much Scrooge McDuck screwed up. Ha ha, only serious.

A couple of simple points: It was Rick Warren, not some Obama operative, who asked McCain to define "rich" -- a word McCain has repeatedly used over the years in saying, for instance, that he didnt't favor tax cuts aimed just at the rich. And McCain explicitly said in answering Warren that he meant $5 million in INCOME -- and an annual income of $5 million is rich anywhere, anytime.

Just to follow up on the income vs. wealth question -- here's the quote, from CNN's transcript of McCain's appearance with Rick Warren. Warren asks McCain to define "rich," and after some BS about whether money can really make you happy, McCain replied: "I think if you are just talking about income, how about $5 million?" So he was definitely talking about INCOME, not, as some commenters here have suggested, total wealth.

does anyone else think that in addition to the chart up top an additional chart showing how many americans fall into each category (using the same categories of income) be interesting to see?

I made $13,900 last year, and I feel pretty well off. Maybe I'm missing something you all see.

I think the perceived need for huge amounts of money is just the result of social conditioning.

Rich, is anybody who makes 20% more than me. A tax is a good tax if my neighbor has to pay it and I don't.

Jim @ 12:02 PM:

My rent last year for a 2-bedroom apartment in a low-income Boston neighborhood was $15,000 for the year.

When you made your comment, I have to wonder where in the US you live (many parts are cheaper than others), and whether or not many of your living expenses are already covered (for example, you might live in a home that's already paid for, or live with relatives who are helping to support you). If so, just know that a lot of people aren't in that position.

Charles, you have neighbors who make 20+% more than you? Are you the sole poor guy in a rich neighborhood?

I agree with sbrennan and robertdfienman. Rich=wealth, not income.

But this is how to define rich, in any society: Depending on the lifestyle you aspire to, you're rich if you have paid for your house, you've paid for your kid'd education, and your retirement is fully funded AND you wouldn't have to work another day in your life. All your responsibilites are covered.

[i]The issue is not simply "It's not *us*, so it's OK. The larger question should be "Is it really right to take someone's money because someone dies?"[i/]

well if that someone wasn't smart enough to use their money on a good lawyer and accountatnt and put it in trusts and other non taxable forms...yep then it's right ;)

Damn str8 one group is against another El Viajero, the Class War is a bitch, especially when one class is routinely suckered into a cease-fire the other never respects. W/a li'l arithmetics i see 1 "McCain rich" could move over 300 second fifths into the middle fifths.
Expropriation of all capitalist accumulation of wealth!
Long live the international socialist revolution!

(hey, if y'all want another cold war...)

A couple of points -

Rich and middle-class are not in the same lexicon of speech. Rich and poor are on the same descriptive level, but middle-class belongs to a different species of meaning. Middle class denotes a lifestyle, while rich is simply a descriptive term referencing how much capital you have at hand at any time.

In economic terms, you are definitely upper class if you make over $150,000 a year, but you probably are not rich. Depending on where you live middle class may be defined as $50,000 to $150,000 for a family of four (including the subheaders lower middle class and upper middle class). Lower class would be less than $50,000, and upper class would be over $150,000.

But our relunctance to speak about class in this country stops people from talking about the "upper classes" who make obscene amounts of money over-charging us for legal, medical and bank services, among other things. The weatlhy, or the elite class, are the bosses and employers of those people.

So in our screwed up vocabulary regarding class, a lawyer who makes $200,000 a year and a family of four who makes $50,000 a year total can be both described as part of the same class, when they obviously are not. And the people in the elite class, well they hide and we are assured (by the media and the Repubs) that they don't exist. People in the elite class are as likely to claim to espouse middle class values as anyone, so their wealth becomes hidden in our language.

Divorcing "middle class" from any reference to money is how politicians with millions of dollars in accumulated wealth can purport to speak for the middle class; because we've made middle class into a value system. That is why lower class or poor people don't often realize they are lower class or poor. Because in their minds, those labels constitute a certain set of values - the mythical drug abusing welfare mother with six kids, rampant crime, no education. These low income people assume that they are not like THOSE low income people, therefore they assume they are middle class. Even when that is not true.

Regardless, if you make $5 million dollars a year, you are rich, wealthy and part of an elite class of earners no matter how you slice it. So Ezra basic point is spot on, McCain is completely out of touch with who middle class people are and what they must do to support themselves.

regarding the "manhattan argument", which is a pet peeve of mine...

just because there are a lot of rich people concentrated in Manhattan doesn't mean that some of them are middle class.

Watching a bunch of rich and upper middle class folks try to define being rich... priceless!

Thanks for helping us to put some definitions on "rich." Currently, my definition of "middle class" is: NOT living with your parents who have dementia, having health insurance, and making the $40K annual salary your child support order says would bring you current. That's my definition for southern Minnesota.

I appreciate all of your prespectives, income vs. wealth, especially the comments on how middle class values blur the middle class concept. Raised as such, I've always considered it as an income marker, not a lifestyle; and values are something quite different, i.e. unrelated. But I understand what you mean.

I am searching for information on what both candidates mean by "tax cuts for the middle class" and what taxable income ranges they are refering too. Both candidates are extremely vague on these points, making jokes (McCain 5M, Obama 25M), skirting the real issue. Has anyone heard anything more specific?

I live in the dc area (yes, the seat of political controvery) and find it difficult to make ends meet...I would prefer to be saving alot more of my income. Being single no kids, I pay alot of tax, too.

Regarding Manhattan...as defined per the tax stimulus effort(75K), it is not economically possible to subsist solely on a middle class income in Manhattan...

The point of Senator McCains comment on $5 million was to take the focus off putting a price on who is rich and trying to focus it back on what is real richness. The ability to own your own home, the ability to provide for your family, the ability to protect them from harm, the ability to retire one day and live modestly without fear of losing their home due to an illness. This is what rich really is. These people are truly happy. Those with money are not really as happy as those who make less but use their income to meet their needs and some of their wants. That's the point McCain was trying to make and he even recognized that most of you would not get it. But he was willing to put it out there anyway. He is truly his own man!