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WDYT? Top ten percent of households (income)


BlsdMama
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It is "only" in the top 25% in the top-earning zip codes of the following cities: San Fran, Boston, DC, Seattle, New York. Basically, among the richest cities per capita in the entire world.

 

That's it. Everywhere else you are well into the top 10%, in many states, you're easily in the top 5%. It's easy to forget what a bubble we live in.

:iagree:

 

We live in the DC metro area and are no where near the 150k income. Almost all of our friends, and everyone I meet homeschooling, is around that number. But that is a small bubble of the people here. When I worked with lower income families, it was clear that 30-50k is very very common, even in my extremely high COL area.

 

IMO, being able to absorb financial difficulties, engage in guilt free shopping, and plan vacations, all while having little debt and saving for retirement/college is upper class. I don't think people should feel bad about having that, it's a wonderful thing to have! But I do think it's important to realize that that is VERY privileged compared to most people right now, it is not the norm. It can be hard to see though. I have family members who make upwards of 300k right now, but they still think they are middle class, and they live in a low COL area. 

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I don't consider anything she posted to have been "elite."

Yes. Every bit of it is. That is probably an indicator you have equal or better income. When you live that way, it isn't elite. It's your normal and likely taken for granted expectation of life. The elite don't sweat those things. Oh they might grumble about it sometimes, but really they aren't losing sleep over it. This is not a character statement against you or anyone else. I don't think having elite class income makes people ogres. But money insulates. It insulates a LOT. It makes it easy to not know how those not in that demographic have to live. Pointing out the difference isn't about character assassination or making people feel bad for having more money. It's just... Idk. It just is and very often there isn't as much to do to change it as the media advertises. It's frustrating.

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Yes. Every bit of it is. That is probably an indicator you have equal or better income. When you live that way, it isn't elite. It's your normal and likely taken for granted expectation of life. The elite don't sweat those things. Oh they might grumble about it sometimes, but really they aren't losing sleep over it. This is not a character statement against you or anyone else. I don't think having elite class income makes people ogres. But money insulates. It insulates a LOT. It makes it easy to not know how those not in that demographic have to live. Pointing out the difference isn't about character assassination or making people feel bad for having more money. It's just... Idk. It just is and very often there isn't as much to do to change it as the media advertises. It's frustrating.

We will have to agree to disagree on this one, Martha. :)

 

Where we live, a household income of $150k is simply not elite. Depending where you live, it may not even qualify as comfortable.

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It seems right to me.

 

I've lived in a few different areas, both high and low COL areas. 150/yr would allow a house, 2 average new cars, sports for 2 kids, and a yearly vacation in the high COL areas.  It would be filthy rich in the low COL areas.  In either case, it is not the norm to make 150/yr. The top 10% seems right.

 

 

 

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@Binip I'm typically more of the conservative mindset, so I can assure you I intended no bias using that graph from DB. Just looking at the lines it does seem misleading. What I took away from the article it was in, was more the idea that income doesn't follow the bell curve, and instead is skewed to the lower incomes. That idea combined with $200K and above being the top 4% reinforces the figure stated by the OP to realistically be in the top 10%, even if the distribution of that top 4% isn't realistically graphed.

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:iagree:

 

We live in the DC metro area and are no where near the 150k income. Almost all of our friends, and everyone I meet homeschooling, is around that number. But that is a small bubble of the people here. When I worked with lower income families, it was clear that 30-50k is very very common, even in my extremely high COL area.

 

IMO, being able to absorb financial difficulties, engage in guilt free shopping, and plan vacations, all while having little debt and saving for retirement/college is upper class. I don't think people should feel bad about having that, it's a wonderful thing to have! But I do think it's important to realize that that is VERY privileged compared to most people right now, it is not the norm. It can be hard to see though. I have family members who make upwards of 300k right now, but they still think they are middle class, and they live in a low COL area. 

 

This.  So very much, THIS!!!!

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I didn't think what WoolySocks posted was "elite" either. I mean, maybe three vacations a year... but I guess it depends on whether those are a weekend away nearby or a full on cruise or trip abroad or something.

 

Money does insulate. But it's so hard to say. We have an old house. It costs. We don't have enough to make the repairs out of straight up savings so we often have had to borrow to do that. Which is no fun, that's for sure. On the other hand, there's a good bit of equity in the house. We put off home repairs to take a big trip every few years. But then we've been known to carry some credit card debt for awhile. We do have some retirement and college savings, but some of that was gifted by parents and grandparents. And some of it was saved and invested over time. We have decent insurance so we don't end up in medical debt. When we need something or something unexpected comes up that's really expensive, it doesn't effect our lifestyle, it just effects how much debt we carry for awhile. I don't know... I just consider all this the roller coaster of the middle class.

 

I get that we're a lot better off than a lot of people. But I don't think we're elite. That's another level.

 

If we could take the money dh makes, sell the house for a fortune since it's worth so much, and then move somewhere really cheap and get a brand new house without any upkeep to it, we'd probably be a little closer to elite. But we still wouldn't have enough to put down tens of thousands on custom stuff or giant vacations. For me, that's the big gap. It's the people who never have to worry about the home repairs or car repairs, who can decide to go on a big trip any time, who don't have to worry about paying for their kids' college. And those people exist. And... for the most part they make a lot more than $150K a year.

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It sounds right to me. We are in a fairly low COL area, compared to where I have lived before (Boston, Philadelphia Main Line -- where people complained that the $1.1 million house I showed them didn't have nice enough countertops! -- and the less fancy DC suburbs), but not as low as some areas. That would be a lot of money here, I think. I don't think our school superintendent makes $150K a year. We would be well above comfortable if we made close to that. I'm talking easy vacations, paid off car, paid off house, major savings, etc.

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Yes. Every bit of it is. That is probably an indicator you have equal or better income. When you live that way, it isn't elite. It's your normal and likely taken for granted expectation of life. The elite don't sweat those things. Oh they might grumble about it sometimes, but really they aren't losing sleep over it. This is not a character statement against you or anyone else. I don't think having elite class income makes people ogres. But money insulates. It insulates a LOT. It makes it easy to not know how those not in that demographic have to live. Pointing out the difference isn't about character assassination or making people feel bad for having more money. It's just... Idk. It just is and very often there isn't as much to do to change it as the media advertises. It's frustrating.

 

 

Martha, I think that you've stated this so very well.

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It is "only" in the top 25% in the top-earning zip codes of the following cities: San Fran, Boston, DC, Seattle, New York. Basically, among the richest cities per capita in the entire world.

 

That's it. Everywhere else you are well into the top 10%, in many states, you're easily in the top 5%. It's easy to forget what a bubble we live in.

 

But even realizing that we live in a bubble, for those of us in those zip codes (and all their surrounding suburbs - i.e., a lot of people!), $150K is NOT the top 10%, know what I mean?

 

(You are a lot better educated on this than I am, and I'm not trying to start an argument - just pointing out that while I *KNOW* it's a lot of $ in other places, it's just NOT in some places. A family working with $150K in one of those zip codes faces many of the same budget challenges as a family working with a much lower number in a different zip code.)

 

I share your thoughts about the growing income inequality in our nation.

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@Binip I'm typically more of the conservative mindset, so I can assure you I intended no bias using that graph from DB. Just looking at the lines it does seem misleading. What I took away from the article it was in, was more the idea that income doesn't follow the bell curve, and instead is skewed to the lower incomes. That idea combined with $200K and above being the top 4% reinforces the figure stated by the OP to realistically be in the top 10%, even if the distribution of that top 4% isn't realistically graphed.

 

Yes--it was less targeted at you, the poster, than the whole media failure on this question. The failure to represent the gaping inequality here by focusing on the top 10% or by obscuring the top 1% of incomes and how different they are from the rest of our incomes is what I wanted to point out, not that the point was invalid because the graph is misleading.

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"Is able to afford shoes" is not my definition of "elite."

It is when you can't afford shoes.

 

I know she was saying it tongue in cheek, but still...

 

Yes. When you can't buy shoes, being able to afford it without sweating seems elite to you.

 

So while everyone in the elite is focused on how this makes them feel uncomfortable bc of the wording, they are missing the real point of the situation. Privledged, elite, upper classes, whatever.

 

I don't care what term is used. That's not the point.

 

The point is 90% of the population can't even fathom living the way 10% take for a given as just daily normal life.

 

That's a problem. It's a daily problem for an ever growing number of our population.

 

For the 10% to respond to that with how uncomfortable the terminology makes people seems to be a deflection of recognizing, much less dealing with, the problem at hand.

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We will have to agree to disagree on this one, Martha. :)

 

Where we live, a household income of $150k is simply not elite. Depending where you live, it may not even qualify as comfortable.

 

I don't think Martha's point was whether or not $150,000 felt elite to you, no matter where you live. Her point was that anyone who can afford to replace four large appliances in a year without pain, go on two or three vacations annually, eat out regularly, manage emergencies without flinching, and stop at Starbucks without concern is doing far better than most folks are in the US. It has nothing to do with how privileged or not you may feel.

 

We're also in a high COL area, and I know that $150,000 doesn't go nearly as far here as it would in rural Oklahoma. It doesn't change the fact that anyone who doesn't have to worry about money pretty much every day is doing better than average. When you live in a bubble where pretty much everyone you know (though not everyone you interact with, like your grocery store clerk) makes as much or more money than you, it seems very normal. If you don't personally know people who are struggling to pay the rent or the mortgage, it is easy for it to seem like a small percentage of people. In reality, it's not. The average household income in the US is not very high, even for low COL areas, and that makes life very hard for a lot of people, but that struggle is largely invisible to those who are substantially better off.

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I disagree, Martha. People who are among the top 10% of earners have nowhere near anything in the top 10% of incomes, and I think it's misleading.

 

The distribution of wealth is such that pretty much everyone in the bottom 95% is in a totally different class, in terms of income, than everyone above them. Like it is hard to explain just how different money is working at these levels.

 

Elite has a meaning.

 

Being able to eat organic, eat fish, and eventually buy a home, are indeed privileges in our society, but they are privileges that you could theoretically work up to. I mean at least to that level, I have, most of the people I know at that level started out poor or middle class at best. We eat salmon. We get vacations. That is privileged.

 

But when we talk about elite, there is a qualitative difference in terms of what kinds of things that money can buy, that simply does not apply even up through the $200k income bracket and believe me wouldn't I love to be near that. But I know people in that bracket.

 

Anywhere under $250k, you are essentially accountable to the law. You can't buy your way out of a ticket. You can't influence a politician. You probably fly economy when it's on your own ticket. You go on vacation further, but not more often than others because you need to keep that salary to keep your home. You still worry about making enough and while you may have a home, a pension, and shoes, you are about a year or two away from being down with "the rest of us" if you hit disability. If you make $250k and your spouse is not working, 3 years of cancer treatment will send you back to the 20th%ile. Money is still an object. You have a nicer house. You have a nicer coat. You will stay in a nicer retirement home. You have a nicer car. But you still are tied to consumer goods. Your money is just that: money.

 

You know how the elite live? I mean really, qualitatively, what their lives are like? It is insane. It is not, instead of frozen pollock they buy fresh salmon, or instead of tent camping, they go to a time share. It is... they rent out the timeshare. They literally will own not just one mansion across the lake from the campground, but across from maybe 10 campgrounds. There are ultra-wealthy people in this country who have about 20% of our GDP.  Our top 1% of income earners are sharing 20% of the country's entire wealth. And this is not just money. This is not something you get through work. It is a level of privilege people will not know.

 

When we talk about the top 10% as elite, about people who are a year of unemployment + illness away from losing their homes as "elite" while we have individuals who are able to triple a politician's salary in a second through "consulting fees", we are missing the point.

 

I share the disgust with inequality in this country and in fact have dedicated my life, to my eternal exclusion from the elite, to alleviating poverty.

 

BUT I cannot disagree more that an engineer and a teacher are "elite" simply because half of the country is effectively in indentured servitude or working for less than the cost of living. It is not the engineers and teachers who are in an elite. There is a real elite, about 1 - 2% of our population, maybe 3%, whose money works differently than the rest of our money. And those individuals have the power to seriously change the structure of society by merely distributing profits among the people who create the profits--the workers.

 

At present, what teachers and engineers are, is people who have, through unions or unique skills, managed to get their fair share of joint profits, but not more. Whereas the workers are in a very bad place. But the teachers and engineers can do very little other than solidarity, to change the wealth distribution in this country, because we middle-managers are also at the mercy of those who really run the place. Again, if you look at the graphs you will see who are really elite. It is not the same.

 

Privileged? Yes. Elite? No, and that's not semantics. I am using the dictionary definition of "elite" and I use it because I think it has an important distinction about wealth and power and the danger of people having wealth that turns into other kinds of power.

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I agree. A school principal is in that range. Seems normal for an educated worker who is in peak earning years, although many earning in this range will have no pension and must set aside for their retirement. When you compare 150k , no OT, and no pension with 50k plus OT plus pension w/medical, 50k nominal salary isnt looking too bad.

 

I don't think people get pensions anymore.  My dh is in the 50k with OT group, and he has to save for retirement just like the guy making 150k.  I've never heard of anyone working now receiving a pension.  

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If you don't personally know people who are struggling to pay the rent or the mortgage, it is easy for it to seem like a small percentage of people. In reality, it's not. The average household income in the US is not very high, even for low COL areas, and that makes life very hard for a lot of people, but that struggle is largely invisible to those who are substantially better off.

I think believing income inequality is an issue and understanding the financial struggles of the majority of Americans has far less to do with one's place on the economic spectrum and much more to do with one's place on the political spectrum. Not only have the majority of my friends and neighbors in the top 10 percent experienced many years at far lower incomes while acquiring education and job experience, but they also actively support political policies that aim to address income equality and the decline in economic mobility in the US.
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I think that nobody is arguing about privilege and wealth.

 

I think there is a political argument to be made about the top 1% that is important--when we bring it down to the top 10%, we somehow lose sight of the amazing inequality in our society.

 

The difference that you can see between the 50th percentile and the 90th  percentile is nothing compared to the difference between the 90th and the 99th. I mean it is nothing.

 

This isn't a defense of me. It is an indictment of the elite who would like nothing more than to pretend that the wealth inequality problem in the  rich world can be summed up by a swimming pool, an SUV, an a vacation to Hawaii. There are people who'd love us to believe that the inequality that is ruining our society could be visualized as the difference in house size or something. But that is not the inequality we are dealing with.

 

If that were our problem, we would be a-ok.

 

And I am not in that bracket. I'm not defending myself--I have been on WIC, I have gotten scholarships from Parks & Rec. Right now I'm probably solidly in the 50th% as an individual, but if we filed together, maybe 70th. In fact I defend nobody. What I'd like to point out is that there are people who are making a thousand times what poor people make and it's not earned income.

 

There are people getting totally screwed, people who are not yet getting screwed (the last remnants of the middle class), and those who are doing the screwing. I guess I'd say that the elites are those doing the screwing, but at $150k you are not doing the screwing, you're just not yet getting screwed.

 

To me that is not a defense of an income but an observation about the structure of our society.

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I was wondering how quickly the conversation would become defensive.

 

It's just a matter of statistics, that at a certain income, you are earning more than the majority of households. You may or may not feel wealthy, but objectively, you are wealthier than the majority of households. 

 

It may not be exactly $150k, but that number sounds reasonable across other countries like the UK or AU.

 

There is no judgement involved - it's just numbers. If you hit the $150k mark, you have more income than most people. There's nothing for people to get thingy about. Enjoy the fact you are relatively privileged. Understand that the vast majority of households are not relatively privileged.

 

Obviously, the Bill Gates of this world are privileged in comparison to YOU. Because, statistics.

 

Binip makes a couple of good points.  Someone who is just inside the top 10% has much more in common with someone at the 50th percentile than they do someone in the top 1-2%.  And someone at the 50th percentile has a much better chance of reaching the top 10% than someone just at the cusp of the top 10% does making it to the top 1-2%.

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I think that nobody is arguing about privilege and wealth.

 

I think there is a political argument to be made about the top 1% that is important--when we bring it down to the top 10%, we somehow lose sight of the amazing inequality in our society.

 

The difference that you can see between the 50th percentile and the 90th  percentile is nothing compared to the difference between the 90th and the 99th. I mean it is nothing.

 

This isn't a defense of me. It is an indictment of the elite who would like nothing more than to pretend that the wealth inequality problem in the  rich world can be summed up by a swimming pool, an SUV, an a vacation to Hawaii. There are people who'd love us to believe that the inequality that is ruining our society could be visualized as the difference in house size or something. But that is not the inequality we are dealing with.

 

If that were our problem, we would be a-ok.

 

And I am not in that bracket. I'm not defending myself--I have been on WIC, I have gotten scholarships from Parks & Rec. Right now I'm probably solidly in the 50th% as an individual, but if we filed together, maybe 70th. In fact I defend nobody. What I'd like to point out is that there are people who are making a thousand times what poor people make and it's not earned income.

 

There are people getting totally screwed, people who are not yet getting screwed (the last remnants of the middle class), and those who are doing the screwing. I guess I'd say that the elites are those doing the screwing, but at $150k you are not doing the screwing, you're just not yet getting screwed.

 

To me that is not a defense of an income but an observation about the structure of our society.

 

I mostly 100% agree, except I"m not really an Eat the Rich type.

 

But the difference between 90th percentile and 99th is many orders of magnitude greater than between 50th and 90th, much less 80th and 90th.

 

And between 99th (something like $500,00/yr, right?) and 99.9th - that is the massive leap, and the relevant one for true elite-ness

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I was wondering how quickly the conversation would become defensive.

 

It's just a matter of statistics, that at a certain income, you are earning more than the majority of households. You may or may not feel wealthy, but objectively, you are wealthier than the majority of households. 

 

It may not be exactly $150k, but that number sounds reasonable across other countries like the UK or AU.

 

There is no judgement involved - it's just numbers. If you hit the $150k mark, you have more income than most people. There's nothing for people to get thingy about. Enjoy the fact you are relatively privileged. Understand that the vast majority of households are not relatively privileged.

 

Obviously, the Bill Gates of this world are privileged in comparison to YOU. Because, statistics.

 

Well - *if* wealth is defined strictly by income measurement.

 

It's not really "privileged" to make that much money if everything costs you 3x as much as it does for the person making 50K, ya know?

 

DH and I have often observed that if we just moved to another state, we'd double our "wealth" (and I don't mean that as a complaint; for many reasons, we do choose to live where we live, I get that).

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In my midwestern town, $150K is a comfortable salary but still upper middle, not rich.  A lot of people in that income bracket feel a lot of pressure to spend that much or even more keeping up appearances etc - big newish house, fancy car, expensive hobbies, stay-at-home spouse, etc.  But then others use the money to pay off a modest house and bills, help family, give to charity, save, invest in a small business.  Most folks in either group are not interested in trying to use their money to influence politics etc.

 

Tax rates at that level of income are pretty high.  It can definitely skew the picture.

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I don't think people get pensions anymore.  My dh is in the 50k with OT group, and he has to save for retirement just like the guy making 150k.  I've never heard of anyone working now receiving a pension.  

 

DH gets a pension. He works for the federal government. He gets "x" amount if he retires at 57, and "y" amount if he retires at 60, and so on. This is in addition to what we save in our TSP (government version of 401K).

 

If he retires at 65 (?) we get more than half of whatever his salary is when he retires.

 

He's only 33, so we have time to save. I'm not worried about retirement, which I know is not normal at all for most people.

 

We also take 2-3 vacations/few day getaways a year, sometimes 5 or 6! I woudl agree that we are priviledged, I still don't think we are "elite".

 

I know someone whose husband makes $400,000 a year working in medical sales. I consider them to be elite.

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I live in a very lcol area. $35,000 is considered excellent money.

 

$150k would allow me to be comfortable and pay for my son's current medical needs. That assumes I continue to live close to free as I currently do (luck and planning) and he does not have any additional medical needs. But, for many this level of medical need is not the norm. For me $150k seems like it might go further some place like the UK where they have universal healthcare. If my child did not have the medical issues I would say it is a lot of money here. Big vacations, private school tuition, nicer newer car etc.

 

In a high col where I had to pay a mortgage and everything it would not be as good a deal and I could see it being more difficult to make ends meet.

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In my midwestern town, $150K is a comfortable salary but still upper middle, not rich.  A lot of people in that income bracket feel a lot of pressure to spend that much or even more keeping up appearances etc - big newish house, fancy car, expensive hobbies, stay-at-home spouse, etc.  But then others use the money to pay off a modest house and bills, help family, give to charity, save, invest in a small business.  Most folks in either group are not interested in trying to use their money to influence politics etc.

 

Tax rates at that level of income are pretty high.  It can definitely skew the picture.

 

At the federal level the top marginal tax rate for someone earning $150k (taxable income) is only 3% higher than someone earning $50k (28 vs 25).

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The difference that you can see between the 50th percentile and the 90th  percentile is nothing compared to the difference between the 90th and the 99th. I mean it is nothing.

 

 

 

To me that is not a defense of an income but an observation about the structure of our society.

 

 

True.

 

 

There is a big difference - HUGE quality of life difference - between 25% and 90%.  That is where the top 10% is considered elite.  This is the difference between requiring charity for food/clothes/shelter and being able to give to those charities.  From the pov of the 25%, 90% is elite.

 

 

That said, you are right.  The top 99% are in a different universe, not just a different class.  My dc were watching The Men Who Built America, a documentary on Vanderbilt/Carnegie/Rockefeller/JP Morgan. There is a scene where these Titans agree to buy the next president. Today, we might think we have some equality through unions and such, but those unions are bought out in the same way.

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The 90% earning less than the 10% also are subject to COL pressures. It's not as if the 90% are all in low COL areas, and the 10% are in high COL areas, thereby negating the average relative privilege.

 

I understand how someone could not feel wealthy on $150k (sort of, if I stretch my imagination :)) but the issue isn't really whether you feel wealthy, it's how your income compares to the majority of households.

 

In high COL areas, there is an effective COL adjustment to earnings at all levels.  A first-year accountant in DC earns more than a first-year accountant in Tennessee with the exact same education.

 

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At the federal level the top marginal tax rate for someone earning $150k (taxable income) is only 3% higher than someone earning $50k (28 vs 25).

 

Not when you consider the phase outs of deductions and credits, surtaxes, AMT, and loss of eligibility for various tax-funded social programs.

 

Also the marginal tax rate doesn't reflect the overall amount of tax paid.  A household earning $50,000 could pay very little income tax as a % of that $50,000 (after exemptions, deductions, credits, etc.).

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lol, I live in an extremely high COL area, and we make ends meet on your example of 'excellent money'. True, we don't have to worry about health insurance.

 

Nevertheless, we would be  comfortable, even in a high COL area, on $100 000, let alone $150 000.

 

This debate was had in my city last year, when $150 000 was proposed as a cut-off for things like child care benefit. Many, many people in my city insisted they couldn't manage on $150 000, that they were absolutely stretched and that they needed benefits to cope.

 

I think they are having themselves on, frankly. 

 

the needing benefits thing is a bit insane

 

but the thing is, depending on your social circle, you can be convinced that you need to spend money on things you don't need to spend money on

 

many people in the third world, or even in NYC for instance, would think we in the midwestern US are crazy, *crazy* to only have 2 people per bedroom in a house - but in Missouri, for instance, it is a legal requirement for renting - no more than 2 people. 

 

Even the poor here could largely make do with much much much smaller homes, and less heating/cooling (when I grew up in south Texas we had no air conditioning at all, and generally it was okay except during extreme heat waves), and older cars, and less fast food, and etc.

 

Compared to the world at large we are almost all very wealthy, and they probably think it's insane that poor people in the US demand minimum wage raises, for instance

 

but it's all relative, so it makes sense here - the gap between rich and poor cannot be sustained at this level

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Not when you consider the phase outs of deductions and credits, surtaxes, AMT, and loss of eligibility for various tax-funded social programs.

 

Also the marginal tax rate doesn't reflect the overall amount of tax paid.  A household earning $50,000 could pay very little income tax as a % of that $50,000 (after exemptions, deductions, credits, etc.).

 

Note: the numbers I provided were for taxable income (i.e. after deductions).

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Also I agree with the other posts Martha made.

 

Median wage here is around $46K, so $150k is three times that and sounds pretty darn comfortable to me, even allowing for tax :)

 

I'm looking at a table that says if you earn $140 000, your income is larger than 95% of the population. So I'd imagine it's not all that different in the US.

I believe that's individual income though for Aus whereas for US it was family income. I think there are quite a lot of families in Aus that earn over that amount or would have the capacity to if both work.

 

I don't believe that kind of money goes as far in Aus as consumer goods, food and power are more expensive. However vacations are less high in the luxury stakes because if you have a full time job you have a significant amount of paid leave. If you don't mind camping or very basic accommodation you can holiday cheaply every year.

 

If you are stuck in the casual wage workforce it's much harder.

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hah, if we take a vacation it costs us 1% of annual income for every 3-4 days of vacation (as we run a small business that can't operate without us)

 

In terms of transportation, renting a cabin, etc., we can afford a lot more vacations than we could when we were super poor

but of course now we can't afford to take them often because the business makes no money unless we work

 

we don't even take Saturdays off!  (or Sundays, for me)

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Note: the numbers I provided were for taxable income (i.e. after deductions)

 

Point is that the actual effective rate of tax at the two income levels is vastly different.

 

Granted, the person making $150,000 will still net more, but the difference will be less drastic than it appears at first glance.

 

Chances are that the person earning the $150,000 has also invested a fair amount of $$ into his education and often needs to pay that back, while putting aside college funds for his kids (who won't qualify for need-based education aid).

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College should pay for itself; if it doesn't, why go to college?  (except maybe as a social function a la that princeton mom's letter)

 

If you can't/wouldn't take out loans to go to college or send your kids to college, maybe the degree is not worth what you are paying for it

 

too many people go to college in the US, I am convinced, and overpay for the privilege

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Not when you consider the phase outs of deductions and credits, surtaxes, AMT, and loss of eligibility for various tax-funded social programs.

 

Also the marginal tax rate doesn't reflect the overall amount of tax paid. A household earning $50,000 could pay very little income tax as a % of that $50,000 (after exemptions, deductions, credits, etc.).

But you also have to consider that a couple earning $150k could much more easily shelter the full $36k allowable for retirement income than a couple making $50k. Add to that untaxed flexible spending accounts (health and child care) and the couple making $150K can quickly approach $50K in untaxed income before they even start filling out a tax form and looking at deductions, credits, etc.
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I guess it comes down to this - if you are in the bottom 20%, making do on very little, it's going to be hard to convince you that being in the top 10% of household income is merely middle class.

 

I guess I'm not sure why "middle class" depends on the perspective of the bottom 20%.

 

BTW, if the top 10% is "elite," what is the corresponding term for the bottom 10%?

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Also there is no three vacation a year that is not pretty priveleged.

 

Says the girl who would love one vacation.

 

All depends on how you define "vacation"............. some people define it as Disney and cruises, other define it as a week long visit to Grandma and Grandpa's................... and everything in between.

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Two people at or under median wage is still going to be less than $100 000 - well under $150 000. You'd need three people working at or under median wage to start approaching $150 000. Many, many families have only 1.5 incomes - one full time worker, one part time. Many full time workers are patching the hours together from casual and contract work.

 

I guess it comes down to this - if you are in the bottom 20%, making do on very little, it's going to be hard to convince you that being in the top 10% of household income is merely middle class.

 

A middle class income probably hovers around the median + 20, 000 ? Around 60 - 90 000 sounds about right to me.

 

I dunno, where we live (bedroom suburb of Kansas City), $150,000/year (which, after taxes, is more like $120k?  at most)  just puts you nearish the top 1/4 of residents, and you live more or less like everyone else in terms of neighborhood (slighly posher, mostly the same) and activity (working for a living) and schooling (mostly public schools, because the public schools here are technically good (but in reality they're terrible, that is another thread)).  

 

The difference, as far as I can see, is in incidentals (vacations, clothing, food, cars) and worry.  The middle-upper-middle here ($150/yr) eats fancier food, wears fancier clothes, has a nicer car (or two!), and takes fancier vacations (and maybe 2 or 3 instead of 1 or none).

 

They also don't have to worry about paying the light bill, or the water, or the gas, or think which one is most likely to shut them off for a late payment.

 

But they still wear clothes, and take a few vacations a year, and drive cars, and work for a living, and send their kids to the same schools.

 

People who make $1 million a year don't live here.  They live over in Mission Hills, the super rich neighborhood, and they send their kids to private school, and take all the vacations they want, and some of them work but some don't, and they have 3 cars and sometimes a jet.

 

No one making $150k a year has a jet.

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