Tuesday, August 19, 2008

Are You Rich? John McCain Is And Thinks He (And His Wife) Need Tax Relief

Are you rich? Wealthy? Or just a "wage slave" who makes over $150K? Ezra Klein responds after the Saddleback Church/Rick Warren rich-people encounter with a report and a graph of what that means in the United States today in his essay for Prospect. It seems to me that without expressing any desire to actually illuminate this issue (in that direction), Mr. Warren has given workers in the U.S. an unexpected look into the secret(s) of the rich (and wealthy). Be sure to read the Comments section as almost all of the comments are lucid and interesting (some are even entertaining!). One helpfully defines the difference between being rich, meaning not having to work, and making an income of over $150K as a particularly well-paid "wage slave." Also, don't stop reading before you get to the Chris Rock quote about the difference between being rich and wealthy. It's worth the time. (Emphasis marks are mine.) ___________________________________________

Momma said wonk you out Ezra Klein August 18, 2008 YOUR WORLD IN CHARTS: THE RICH DEFINE THE RICH. One of the more interesting subthemes of this election has been the elite political class's struggle to sync its understanding of the economy -- based around well-educated people who live in New York or DC -- with the national income distribution. Charlie Gibson, for instance, thinks families making $200,000 are "middle class," hence redefining the middle class as the 97th percentile of the income distribution. Just ordinary investment bankers, struggling to make ends meet. On Saturday night, at Saddleback Church, Barack Obama and John McCain were asked what income level made someone rich (give Rick Warren his due: This was one of the campaign's more useful forum queries). Obama said $150,000, which is somewhere around the 94th percentile. John McCain said $5 million, which is about $3.4 million more per year than you need to qualify for the top 0.1 percentile. This is one of those spaces where an individual's context really does have an affect on policy. The Obamas have recently started making a lot of money, largely on the back of book sales, but both of them came from backgrounds where $150,000 really was rich. Indeed, if you live in Hyde Park, Chicago, it's pretty clear that $150,000 is rich. Charlie Gibson, meanwhile, lives in New York. He hangs out with extremely rich people living extremely costly lives. When you're dealing with Manhattan real estate and private school fees, it's perfectly possible (though certainly not necessary) to struggle beneath $200,000 a year. Gibson sympathetically recoils from those who would tax his "struggling" buddies. And then there's McCain. If your wife has hundreds of millions of dollars and you spend your days in the United States Senate, your bar for riches changes a bit. Nothing he said, incidentally, is wrong. $5 million is indeed rich. It's just $4,800,000 more than you'd need to be making for most Americans to see you as rich. McCain's answer is just profoundly out-of-touch. But that has consequences. Asking the world's tallest man to set cabinet heights, or the world's strongest man to decide the tension of jar lids, is going to leave you with some pretty tall cabinets and some pretty tightly closed jars. Similarly, asking one of the world's richest men to set your tax policy will end up with a pretty skewed set of policies: Say, a tax plan that gives his wife $370,000 in breaks. Again, nothing weird or malign: Just the naturally skewed perspective of someone who lives on a particular extreme, in this case, the extreme edge of the wealth distribution. Meanwhile, tracking all this is important, so I've made a graph fitting the various definitions of rich and middle class amidst the actual income distribution. Click on it for a full size version. Enjoy.
Click here for the telling graph and Comments section. Suzan P.S. I know I haven't mentioned this lately, but I'm very appreciative of any extra shekels you might be able to contribute to my effort here as I am neither rich nor wealthy (actually low-lower lowest class (see chart)). ______________________________________________

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