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* A commenter posted these thoughts here yesterday…

When people talk about taxing the rich I always wonder what their definition of rich is. I suspect they think of it in terms of some multiple of their income. After all, everything is relative. I am curious as to whether that multiple is consistent across all income levels.

* Question: What annual income would you consider to be “rich” for taxation purposes? Explain, please.

posted by Rich Miller
Friday, Oct 26, 07 @ 9:23 am

Comments

$500,000

Comment by Jason Friday, Oct 26, 07 @ 9:26 am
As someone who has lived far from the metro Chicago area their whole life, I will say this hoping it doesn’t sound too stupid to others. I have always felt that a family making over 100k per year was doing good. But I might have to set the bar for ‘rich’ a bit higher. Maybe 200-250k per year.

Comment by Robbie Friday, Oct 26, 07 @ 9:36 am
I would consider 250k a year and up to be rich, Rich. the Median household income is only 46k http://www.whitehouse.gov/fsbr/income.html. For tax purposes the Highest tax bracket starts at 174,850.

Comment by Ghost Friday, Oct 26, 07 @ 9:40 am
Perhaps between half a million to maybe three quarters of a millions dollars. And perhaps this should be considered an individual value not a combination of assets between say a married couple who make good money.

Comment by Levois Friday, Oct 26, 07 @ 9:42 am
I would say it starts in the top 25% of incomes with being very well off, and moves upwards. The top 10-15% I would say qualify as rich, and the top 5-10% as super rich, and the top 1-5% as obscenely wealthy.

Rich should also be defined by net worth.

If I had to quantify it, I’d say incomes of over $200 or $250k would qualify as very well off, if not “rich”. For people with a good educational background, being over $100k is not uncommon anymore in urban/suburban areas.

Rich is also the guy behind the capitolfaxblog.

Comment by jerry 101 Friday, Oct 26, 07 @ 9:45 am
I would look at wealth, and I would say those with non-home assets exceeding around 2-3 million. Income is too fleeting. But if pressed I’d say the current top bracket of about $350k is a good estimate. “Very rich” being a different matter…

Ghost-

Not a big deal, but 174,850 is for married filing seperately

Comment by Greg Friday, Oct 26, 07 @ 9:50 am
Jerry,

Someone in the 95th percentile would qualify under your first sentence as “obscenely wealthy,” yet, at best, would barely make your $200K “very well off” classification in the second sentence.

Comment by Greg Friday, Oct 26, 07 @ 9:54 am
More than what I make *^^*

Comment by Pat Collins Friday, Oct 26, 07 @ 9:54 am
A quarter of a million dollars a year in income. A million dollars in liquid assets, i.e. not a small business and not a farm.

– SCAM

Comment by so-called "Austin Mayor" Friday, Oct 26, 07 @ 10:00 am
Taking a more philosophical view of it as opposed to charts and tax brackets it seems that rich can be defined as those that can earn enough to pay all their bills and have enough left over to take care of retirement, medical emergencies, and leisure travel and other activities. And this does go to net worth, people earning a good income but doing nothing but servicing their debt are not really rich. They are dodging bullets and hoping nothing goes wrong. I also marvel, being from Bloomington-Normal, of “rich” people who live in 400,000 dollar houses but don’t have any money to furnish them after they pay the mortgage. What do I consider rich? About 250,000 to 400,000 a year depending on where you live in the country.

Comment by Mark Johnson Friday, Oct 26, 07 @ 10:03 am
Over $300,000, but above that, a progressive tax should be graduated. Those making $301,000 should not pay the same rate as those making $3 million.

The Democrats, by the way, in addition to continually trying to soak the middle class to support the poor, have been very resistant to taxing the profits of hedge fund traders, some of whom make close to a billion a year. That’s because the traders give a lot of money to Congressional Dems.

Comment by Cassandra Friday, Oct 26, 07 @ 10:09 am
In Chicago, $750,000 or more in annual income with $2 million in liquidity. Downstate, $350,000 annual income and $1 million in liquidity.

Comment by one of the 35 Friday, Oct 26, 07 @ 10:13 am
Here’s a good source to see what the existing breakdowns are:

http://en.wikipedia.org/wiki/Household_income_in_the_United_States

I was surprised to see 17% of the households have a combined income of over $100k. Less than 3% have a combined income over $250k. “Rich” is probably somewhere between the $100k and $250k ($150k covers the top 7% of household incomes), “Super Rich” could be argued as above $250k, but I will grant that there is a heck of difference between a family earning $250k a year and one earning $2 million a year.

Also, $150k a year will bring you a very nice household standard of living in northern Mississippi or anywhere in South Dakota, and a very modest one in San Francisco or Beverly Hills.

Comment by Six Degrees of Separation Friday, Oct 26, 07 @ 10:14 am
Cassandra,

Hedge fund traders’ incomes are taxed at 35%. LLC carried profits (those that go to owners, could be of hedge fund but probably not a trader, more like private equity owners) are the ones that can be carried.

Comment by Greg Friday, Oct 26, 07 @ 10:14 am
Greg, thanks for catching that. Looks like top tax bracket actually goes to 349,700 for singles and married filing together or head of households.

Comment by Ghost Friday, Oct 26, 07 @ 10:16 am
Speaking of “net assets” people and businesses will adjust their net assets if used for the basis of taxation or other benefits. For example, “Disadvantaged Business Enterprises” are masterful at keeping the owner’s net worth down by investing profit in their business and otherwise sheltering their income, in order to keep qualifying year after year for a piece of lucrative government contracts.

Comment by Six Degrees of Separation Friday, Oct 26, 07 @ 10:18 am
$500,000. For someone making that income an extra 5% in tax equals $25,000. Sure, they might have to stay at a 3-star hotel instead of a 4-star hotel when on vacation, but they will not be starving or doing without.

Comment by Bluefish Friday, Oct 26, 07 @ 10:21 am
Greg,

More precisely, a substantial portion of the income of hedge fund managers is taxed at capital gains rates.

Comment by Cassandra Friday, Oct 26, 07 @ 10:26 am
I’d trade it all for a dollar more. I don’t have a definition for rich. But to play this game, $300k per annum.

Comment by Wumpus Friday, Oct 26, 07 @ 10:26 am
Ok, I apologize for jumping all over the econ-related posts. Basically, my assumption is that most people here are of a govt background, and that I should take it upon myself to try to represent the usually politically-apathetic trading crowd. So I don’t mean to come off as a heckler–I’m just assuming that govt folks don’t have a lot of interaction with hedge fund guys, and thus might be interested in how we approach things.

Comment by Greg Friday, Oct 26, 07 @ 10:32 am
Is it really necessary to define “rich” for the purposes of taxation?

Comment by Squideshi Friday, Oct 26, 07 @ 10:36 am
Taxes should be paid by ALL.

The idea that the “rich” should be taxed more is similar to saying that being wealthy should be considered a crime. No one should be punished by more taxes because another person labeled them as “rich”.

Does everyone benefit from government? Of cource they do. What we need to focus on is to ensure that each of us pays what we can and should be able to pay to support our governments.

Fingerpointing is simply wrong, and that is what this question wants us to do.

Comment by VanillaMan Friday, Oct 26, 07 @ 10:36 am
Cassandra, do you think the federal GOP would even entertain the idea of taxing hedge fund managers? The Dems are working on it which would have been out of the question if Speaker Hastert was still running the show. The Dems have always been the party to raise taxes on high incomes (to support the middle class as well as the poor — see aid to higher education as a good example). The GOP has always cut taxes on the rich. That is one of the fundamental differences between the two parties and any attempt to blur that distinction is hacky.

Comment by Dan Johnson-Weinberger Friday, Oct 26, 07 @ 10:37 am
I think being deemed “rich” should be based by region and needs to include property taxes. Someone who makes $100,000 a year and lives in Rushville would be doing quite well, but that same amount might not cut the mustard in Evanston or Barrington.

When both parents work and you include medical expenses, daycare/babysitting, food, clothing, transportation, property taxes, school tuition/college savings, etc., a “wealthy” family in the suburbs or Chicago might just be getting by. As such, the definition of “rich” cannot merely be set in stone.

One of the reasons why it stings me that capital gains are taxed is that many people who buy into stocks or mutual funds have to borrow money to roll the dice and hope to make a better life for themselves and/or their families. While paying off those loans and trying to invest more to have a better retirement or provide more money for college tuition, they are simultaneously socked with a nice bill from the IRS. What incentive is that?

Comment by Team Sleep Friday, Oct 26, 07 @ 10:48 am
Dan

Good intentions aren’t enough. Just like with the Iraq war, we need to see some actual results from our new Democratic majority. So far, the results have been pathetic on really important issues.
And don’t talk about the minimum wage. That wasn’t even very controversial. An easy win.

By the way, I believe Chuck Schumer has been a big defender of hedge fund managers keeping their
obscenely low tax rate.

Comment by Cassandra Friday, Oct 26, 07 @ 10:48 am
A dollar more than what I make. The government should tax those rich SOB’s more.

Comment by Tom Friday, Oct 26, 07 @ 10:54 am
Re: looking at “net worth” vs. “income” as a basis for taxation:

Again, if we encourage people to shelter their income by going deep in debt for mortgages they can’t afford, living in places with high property taxes, etc., is this good social policy? Should we encourage the wealthy and upper middle income earners to save and invest more instead?

Comment by Six Degrees of Separation Friday, Oct 26, 07 @ 10:59 am
Greg,
you’re right. I shouldn’t comment before I drink my coffee.

Comment by jerry 101 Friday, Oct 26, 07 @ 11:10 am
Bluefish-

Congratulations, you have just raised $25 billion. ($25,000 x 100 million households x 1% of households (est.) earning more than $500k.

About 1% of a 3 trillion federal budget.

Comment by Six Degrees of Separation Friday, Oct 26, 07 @ 11:11 am
Well considering my income and assets are well over one million and I don’t consider my self rich.
I would have to say in the area of $10 million.

Comment by Lula May Friday, Oct 26, 07 @ 11:38 am
I would use the median family income and then standard deviations. So within 2 standard deviations of the median, I would call that middle class. 3 -4 standard deviations I would consider upper middle class and anything above 4 standard deviations I would call rich.

I would definitely stay with mathematics to define these things. As long as you feed it good figures math doesn’t lie or get emotional or anything like that.

Comment by cermak_rd Friday, Oct 26, 07 @ 11:39 am
Being “rich” for taxation purposes is silly. If Sam makes $500,000 and is taxed at 30%, he pays $150,000 in taxes. If Dave makes $25,000 and is taxed at 30%, he pays $7,500.

Both are paying their fair share. If you tax Sam at a higher rate than Dave, you punish Sam because he has been more successful.

I am all for a flat tax that begins at a predetermined level of income.

Comment by Fan of the Game Friday, Oct 26, 07 @ 11:43 am
I would say $300,000 is a good number. I used to make about $90,000 and was happy. Then a buy out happened and the restricted parting gifts tanked. I now might make $30,000 but I own my own firm and the family farm. But I might make more again someday. Maybe I should change my nick to River Bottom Bob?

Comment by Whizbang Friday, Oct 26, 07 @ 12:05 pm
Cermak-

Assuming a normal distribution, 2 standard deviations is the top 4.6% (a household income somewhere between $150k and $200k according to US Census 2005 data), 3 standard deviations is the top 0.3% (likely around $1 million), and 4 standard deviations is 0.01% (a teeny tiny sliver of households, likely in the multi-millions).

Comment by Six Degrees of Separation Friday, Oct 26, 07 @ 12:17 pm
I would tie tax brackets to income quantiles.

For upper income, I would consider the top 5% rich (in 2006, households making over $174K)and the top 20% well-off (in 2006, households over $97K). I would tax those brackets higher. I would not be opposed to taxing those who make over $1 million at 80% or more of that in excess.

Why? I do not think it is a crime to make that much, but they get a much greater benefit from our society and impose a much greater burden. They use more resources across the board, and by capturing that wealth for themselves, they ensure that low wage workers will continue to make less than they need to get by, which poses an additional burden on society. This gap has been growing dramatically over the last few decades and we see the resulting cost focused on the low end. Indeed, to maintain their high income, it is common to hire undocumented workers and offshore other work.

Why is this fair? Education is a big recipient of tax money in the state. A low wage worker receives a direct benefit from his/her education, those higher up in income tend to profit not only from their own education, but also from that of their employees.

I realize that higher income pay more tax dollars simply as a result of making more. But I would argue their benefit is proportionally higher and that the cost of their actions is proportionally higher as well.

see the census web site for income stats: http://www.census.gov/hhes/www/income/dinctabs.html

Comment by Pot calling kettle Friday, Oct 26, 07 @ 12:27 pm
fortunate at $100k
well off at $200 k
rich at $500 k

I agree that wealth and not income is probably the best measure, but I was implicitly assuming that for those not born into wealth, income is a good proxy.

Comment by late night anon Friday, Oct 26, 07 @ 12:28 pm
To clarify:

There are about 100 million households in the US.

There are only 10,000 households in the US making an income 4 standard deviations higher than the average (100 million households in the US times .0001 or .01 percent). These are likely to be earning several million $ per year, but to be sure, we would have to get the super-fine census data.

There are 300,000 households making an income 3 standard deviations above the norm (100 million times .003). Again, likely to be over $1 million household income but can’t be sure w/o superfine data.

Then there are 4.6 million households making 2 standard deviations above the average, which annual household income we can pinpoint at somewhere between $150k and 200k a year based on the 2005 tables.

Comment by Six Degrees of Separation Friday, Oct 26, 07 @ 12:28 pm
The IRS just released this stat. ” The bottom half of all wage earners in America earn just 12.8 % of all the income made in America last year. Think about those figures as relates to carving up a pie. Divide any size group in half, give one half 12.8 % per cent of the pie. The other half gets 87.20 % to gobble. Get the picture. The bottom 50% earnings are at their lowest levels since the Great Depression. If your making the big bucks pony up the taxes. Now there is one political party that NEVER wants to discuss CLASS warfare. Wonder which one that is ? Trouble is those bottom 50 % have been conned into thinking they will all be in the upper 50 % someday ( which won’t happen for 99% of them ) so they don’t squawk enough and the ” fat cats ” keep getting off easy !

Comment by bluedog demo Friday, Oct 26, 07 @ 12:32 pm
I agree with the $300,000 (annual income) figure, and/or $1 million in liquid assets.

Comment by Snidely Whiplash Friday, Oct 26, 07 @ 12:39 pm
Well it’s also relevant that 51% of Americans pay no net taxes. There’s only so much tax policy can do to prop up certain incomes. As a proportion of total income, yes, their share has fallen. But their real income levels, on average, are rising–that is not in dispute.

And Pot, I do sympathize with the inequality issue. But with respect to “capturing” type arguments, I’d point out again that wealth is not zero-sum, so their wealth is unlikely to have been “taken” from someone else. This is why GOOG can ipo for $100B, and nobody loses, but a couple super-rich dudes emerge. That begs the question: from whom did they take?

Comment by Greg Friday, Oct 26, 07 @ 12:41 pm
80% of Americans identify themselves as “Middle Class.”

No one, NO ONE, calls themselves “rich.” Upper class, sure. But “rich” is a loaded term.

If you’re going to devise a tax plan that targets “upper class” folks, you better say “millionaires” or “The richest 1% of Americans.”

Because, if you say your going after “the rich”, people making more than the median household income will assume either that you mean them or you’re coming after them next.

P.S. There’s a big difference between “Upper Class” in Chicago, Springfield and Mt. Vernon.

YDD

Comment by Yellow Dog Democrat Friday, Oct 26, 07 @ 12:43 pm
Greg: Since there is a limited supply of money in the system, they took from someone. In order to buy expensive stocks, someone may have to pay employees a slightly lower wage. Because the cost is so spread out, the burden tends to go unnoticed with respect to individual actions, but the collective result is noticeable.

Comment by Pot calling kettle Friday, Oct 26, 07 @ 12:47 pm
Pot:

I’m sorry, that’s just not right. I promise you that wealth grows at a positive real rate, as does money supply. I totally understand your inequality point, but your econ stat is wrong.

Comment by Greg Friday, Oct 26, 07 @ 12:51 pm
If the notion is “tax the rich” because you want to level incomes, it seems you would want a geographic adjustment.

Rich in Chicago and rich in Danville are very different things.

It’s reading comments above that can make one a flat taxer fast.

If the notion is to tax the rich to raise revenue, then the best solution is to create more rich people.

Investing creates rich people, and gov investiment in education and infrastructure does that… but the best investiment decisions left to the market…

…so the best way to create rich people to tax is to keep taxes lower and have people invest…

Comment by Bill Baar Friday, Oct 26, 07 @ 12:51 pm
My definition of rich is having sufficient investment principal that I can live in my chosen region off the return on investment without touching said principal.

Now to the real point. We should all pay the same PERCENTAGE of our income for taxes. Just because a person makes doesn’t mean they should pay more in taxes nor does it mean they consume a higher percentage of government services. If anything the reverse is true!

Comment by Kevin Highland Friday, Oct 26, 07 @ 12:52 pm
…the board dropped part of the post….
My definition of rich is having sufficient investment principal that I can live in my chosen region off the return on investment without touching said principal.

Now to the real point. We should all pay the same PERCENTAGE of our income for taxes. Just because a person makes X AMOUNT doesn’t mean they should pay more in taxes nor does it mean they consume a higher percentage of government services. If anything the reverse is true!

Comment by Kevin Highland Friday, Oct 26, 07 @ 1:28 pm
Bluedog demo-

Some of those wage earners in the bottom 50% are high school and college kids earning extra money, retirees, part-time or low income workers who are spouses of high wage earners, etc. For example, I am over the 50% line and my wife is under the 50% line, but I am not rich and she is not in poverty. You may have a point here if you uncover more data, but household income is a much more reliable indicator of what’s really happening than individual wage earner data.

Comment by Six Degrees of Separation Friday, Oct 26, 07 @ 1:43 pm
Pot your underlying assumption that their is a limited amount of money in the system is not completly correct. People tend to think of money as being a single pie that is divided up amongst everyone. If somone has a bugger peice then somone else must have a smaller piece. Without getting into a complex discussion of economics, there is not just a single pie. Over time we bake new pies. A persons piece of pie can come from a newly created pie, thus not reducing at all the pie pieces already in existance.

Comment by Ghost Friday, Oct 26, 07 @ 1:45 pm
Greg & Ghost: I agree that the money supply grows with inflation, but in recent history, the top earners have been taking a larger percentage of the growth and the pie than they have in the past. That larger percentage has been at the expense of the earnings of low wage workers who have seen real spending power stagnate or decline. The other part that has been overlooked here is that we are looking at household income. Lower wage households now need two incomes to match the purchasing power of one income 30-40 years ago. Again, the top gaining at the expense of the bottom.

In addition, that bigger pie is also at the expense of the future in the case of many of the resources we use at non-sustainable rates. (I know the economic cycle will shift us to other resources, but again, there is a cost to that shift.) In all of these things, I argue that the top is getting larger gains at the expense of the rest of us, so they should pay a higher percentage.

Comment by Pot calling kettle Friday, Oct 26, 07 @ 1:56 pm
Ghost,

Exactly. This is a huge misperception. Just google “gdp growth” or “money supply” or whatever, it’s not that difficult to learn. You can also just think about it anecdotally: look at my goog ipo example; or ponder how a stock market could exist without wealth growth (hint: if not, daily individual moves would net out to zero.)

Whatever you do with the tax code, just make sure you don’t discourage the risk of capital. Less investment = no wealth creation = lower real incomes for everyone.

Comment by Greg Friday, Oct 26, 07 @ 1:57 pm
6 degrees - actually, it creates a lot more than that. Using 1 million HHs earning over $500,000, the minimum (not the maximum) 5% would create is $25,000 per HH. At $2 million, we’re at $100,000 extra. But since it is such a small drop in the federal deficit (which has exploded under the Bush Administration), I would assume you’d prefer 10% or more over what they pay today.

My original point is that these folks won’t miss it or have their quality of life diminished.

Comment by Bluefish Friday, Oct 26, 07 @ 1:58 pm
I find some of these numbers really funny. You have to make $350,000 a year to be “rich” or one guy said $750,000 in 12 months? You people must be kidding. I grew up the son of a nurse and cop, and me and my wife have comparable jobs helping society - not stealing from it - that most would consider middle income. Our annual take is about $80,000. We both have advanced degrees. I would certainly consider double our income to be “rich” and anything over $350,000 in 12 months “really, really rich.” That is like $13,500 in monthly income. You could pay for a half a million dollar house and half a dozen mercedes with that!
Just sayin’ — everyone cries poor when the tax man comes - but to not consider yourself rich at over $350,000 in income a year is just insulting to the rest of America.

Comment by Standard of living Friday, Oct 26, 07 @ 2:34 pm
Bluefish-

Maybe another 10% taxation on household incomes over $1 million/year would be fair and good for society, but at 400,000 households max in the US at this income level, this extra taxation would raise $40 billion, about 1.3% of this year’s federal budget. More than nothing, but still a drop in the bucket. And as a practical matter, these people can afford to hire an attorney for $20,000 to figure out how to avoid paying some or all of that $100,000.

Comment by Six Degrees of Separation Friday, Oct 26, 07 @ 2:51 pm
“Rich” is kinda like pornography. I don’t know how to define it, but I know it when I see it.

Comment by Jaded Friday, Oct 26, 07 @ 2:57 pm
I believe you have to separate two concepts — wealth and income. Wealth represents the value of the Assets you own less the value of the liabilities you pay. Income represent the flow of dollars from the Assets you own.

Rich is, as some have said, related to not having to liquidate your assets, not only living off the income flows and but investing enough after taxes from those flows to offset the effects of inflation.

It is that investment in projects which increases the wealth of the country, creating jobs and generating sales. You can use both the sale of some of your assets as well as the money you have saved from your income to do this.

There is a misbegotten theory in economics regarding the decreasing marginal utility of income. That the last dollar earned has less value than the next to last. Thus the increase in the marginal tax rate on income will have no adverse effect upon an individual. This comes from the apple tehory. If a person eats one apple, the pleasure from eating immediately a seoond apple is less; a third apple, even less.

It does not transfer to Money and its uses.

Comment by Truthful James Friday, Oct 26, 07 @ 3:02 pm
We have an example of the politics of avarice going on here…. anyone who makes more than me is rich!

A good point has been made in this thread about the size of the tax increases and the expected increases in revenue. The increases are small. Rep Rangle recognizes that and want to tax everyone from the 100 to 150K range and up. That a lot of people who may be comfortable, but are not rich.

Lets remove the tax benefits that people like the Kennedy’s and Soros’s use to avoid paying their taxes. Buffet was said to acknowledge that his effective tax rate was less than that of his executive assistant. Does not sound fair to me.

Clearly taxation needs to be shifted from income/salary to wealth. A dollar of profit should be taxed the same way if it comes from the sweat of your brow, of from a ladder of t-bills provided by a rich uncle.

As far as the whining about the rich using more energy etc., consider how many people are employed because of the so called excesses of the rich.

Also keep in mind that each of the tax cuts has actually increased the revenue going to the federal treasury. This has been true of every tax cut since the days of Jack Kennedy. What do you think will happen when the taxes come back into play?

Comment by plutocrat03 Friday, Oct 26, 07 @ 3:32 pm
Hold your tomatoes, but…

What about taxing the rich in knowledge and skill?

There are so many people with skill sets and knowledge who only share those things with OTHER very wise or skilled individuals.

Why not sincerely “teach” a man to fish, instead of just giving the “fish scraps” all the time?

Comment by HelpMeUnderstand Friday, Oct 26, 07 @ 3:44 pm
What is “rich” for tax purposes? We talking Cairo or Chicago? There’s the rub.

Comment by Smitty Irving Friday, Oct 26, 07 @ 4:29 pm
Do you want to tax more or raise more revenue for the govt.? Sometimes lower tax rates raises more revenue. Just look at fed govt over the last few years. Lower rates, more than expected revenue.

Comment by Ben Friday, Oct 26, 07 @ 4:59 pm
Being rich is having enough to meet your needs, the brains to not throw it away on “stuff” and the wisdom to understand that lots of money brings lots of problems. I’m very rich.

Comment by Mr. Wizard Friday, Oct 26, 07 @ 7:03 pm
In questions of definition, I’ve found that sometimes functional definitions help.

Super Rich: Probably own multiple homes around the world, each worth multiple millions. Have a sea-going yacht over 100 feet, with a helicopter on board and a fulltime crew of 12 or more. Can’t remember the last time they flew commercial; own their own jet(s), and employ fulltime crew to fly and maintain them. Don’t get a paycheck from a job. Donate 10s of millions to charity annually. Have household staffs in all their homes. Probably have a hospital named after them, and very likely the business school at their alma mater named after them (or their father). Have no idea how much they pay in taxes, but have fulltime employees working on minimizing it. Net worth of at least $500m, more likely a billion or more.

Rich: Own 3 or 4 homes. Probably have a driver, but might drive themselves in, say, a Bentley. Own multiple other cars. May own a jet, certainly at least charter when they want to go somewhere. Own a nice boat. Have at least a fulltime cook, housekeeper, and a nanny. Contribute very large sums annually, probably have a hospital wing named after them in a major city, probably endow a chair at their alma mater. May get a paycheck, but it represents only a small part of their annual income. A net worth of at least $50m, probably more than a hundred.

Affluent: Own and drive their own (new) cars, probably includes a BMW or Mercedes, maybe a Rover. Own a nice boat (sail or motor). Have at least a summer (or winter) place depending on where their main residence is. Make sizeable donations annually, their alma mater Director of Development knows them by name, makes sure to talk to them at least once or twice a year. Vacation overseas and/or cruise. Get most of their income from paycheck(s) or own their own small or medium business. Net worth maybe $5m and up.

So, you tell me, what annual incomes are needed to support those lifestyles.

Comment by steve schnorf Friday, Oct 26, 07 @ 7:47 pm
Cost-of-living should go into the state tax equation. For the feds $500K.

Comment by Shallow Pharnyx Friday, Oct 26, 07 @ 11:55 pm