It depends on what the meaning of "is," is....

Okay, so a friend of mine just made a very good point about how we talk about wealth in this country, which given my last two posts, is highly germane. Actually, he said something like, "I think [someone] should install bombs in the heads of democrats that will detonate when they talk about wealth in terms of percentages, I mean who really knows what that means?

Perhaps this is why republicans have such an easy time talking about (nevermind actually passing) their tax-cut-for-the-rich schemes without raising the public ire. For some completely unfathomable reason, many Americans think they are or are just about to become rich. I'm not talking about in comparison to Bangladeshis (pretty much everyone is rich compared to Bangladeshis), I mean in comparison to other Americans. This really flies in the face of some of their own experience. How can you barely afford college and health insurance and consider yourself among the "rich?" Actual rich people do not have these as problems. Really - does anyone think Bill Gates, Paris Hilton, or Dick Cheney have EVER said, "Gee, I'm really concerned about making the payments on my health insurance." or, "We were doing all right until my daughter got sick, the medical bills creamed us, and we lost our house." Well I, for one cannot imagine it.

So, as a public service, let's let's really explore what rich is:

These numbers are 1998-2001 numbers and actually show a bit less of a split between those at the very top and the rest of us.

Population.....Avg._Net_Worth...Threshold_Net_Worth..Avg._Income/yr

---

Bottom_40%:.........$1,100.........NEGATIVE..............$22,000
(4th & 5th lowest quintiles)

Next_20%:..........$61,000.........N/A...................$62,000
(3rd lowest quintile)

Next_20%:.........$161,300.........N/A...................$97,000
(2nd lowest quintile)

(top quintile sub-divided thus:)
Next_10%:.........$344,900.........$257,700.............$135,000
Next_5%:..........$623,500.........$475,600.............$150,000
Next_4%:........$1,441,000..........N/A.................$260,000
Next_1%:.......$10,204,000.......$3,352,100.............$720,000


Now keep in mind that net worth is your assets minus your liabilities; so if you own a $300.000 house which you still owe $200,000 on that contributes a net $100,000 to your net worth. If you keep this in mind, how many Americans have huge outstanding mortgages, (or student loans, massive credit card debt,etc.) that net worth threshold is pretty hard to reach.

But this is another way of saying what we've been saying all along: "rich" is a relative term, by necessity and definition it is rare. How rare? The numbers above show 80% of American households make less than an average $97,000 per year. Only one in ten households make more that $135,000. That includes Bill Gates and the like. Bill Gates can rest assured any tax increase at the top will affect him, and he well may fight it - that is predictable (selfish and shortsighted, but predictable). If anyone can afford to pay a bit more in taxes it is the Bill Gateses of this country - it will change their lifestyle or spending habits not at all. At some later post, I will get into why the rich actually use more government services and should pay higher dues than the not rich.

For the rest of us: I know you work hard, you bust your ass to provide for yourself and your family. You are proud how how you have struggled to get where you are. That a handful of others may have more - some through not a drop of sweat of their own - does not demean your efforts one bit. Be honest with yourself, look around, do you really think you make more money that 98% percent of all Americans? Is paying your bills that easy? Do you have $6 Million or so - in the clear - or earn about $500,000 per year?

So, when someone talks about raising taxes on, oh say, the top 2% of Americans before your hackles go up, take a deep breath, and count to somewhere around $6,000,000 or $500,000 per year, whichever you reach first.